Office Supply Company manufactures office furniture. Recently the company decided to develop a formal cost accounting system. The company is currently converting all costs into classifications as related to its manufacturing processes.
Required:
For the following items, label each as being appropriate for
• direct cost tracing of the finished furniture,
• indirect cost allocation of an indirect manufacturing cost to the finished furniture, or
• as a nonmanufacturing item.

Question

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The Answer of Office Supply Company manufactures office furniture. Recently the company decided to develop a formal cost accounting system. The company is currently converting all costs into classifications as related to its manufacturing processes.
Required:
For the following items, label each as being appropriate for
• direct cost tracing of the finished furniture,
• indirect cost allocation of an indirect manufacturing cost to the finished furniture, or
• as a nonmanufacturing item.

Office Supply Company Manufactures Office Furniture