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Exercise 1-2 (Static) Classifying Manufacturing Costs [LO1-2] The PC Works assembies custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that the company incurs. Required: For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. 1. The cost of a hard drive installed in a computer. Direct labor cost Direct materials cost Manufacturing overhead cost Selling cost Administrative cost 2. The cost of advertising in the Puget Sound Computer User newspaper. Direct labor cost Direct materials cost Manufacturing overhead cost Selling cost Administrative cost 3. The wages of employees who assemble computers from components. Direct labor cost Direct materials cost Manufacturing overhead cost Selling cost Administrative cost 4. Sales commissions paid to the company's salespeople. Direct labor cost Direct materials cost Manufacturing overhead cost Selling cost Administrative cost 5. The salary of the assembly shop's supervisor. Direct labor cost Direct materials cost Manufacturing overhead cost Selling cost Administrative cost 6. The salary of the company's accountant. Direct labor cost Direct materials cost Manufacturing overhead cost Selling cost Administrative cost 7. Depreciation on equipment used to test assembled computers before release to customers. Direct labor cost Direct materials cost Manufacturing overhead cost Selling cost Administrative cost

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