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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 57
Products versus Services, Cost Assignment
Holmes Company produces wooden playhouses. When a customer orders a playhouse, it is delivered in pieces with detailed instructions on how to it together. Some customers prefer that Holmes put the playhouse together. Therefore, these customers purchase the playhouse, as well as pay an additional fee for Holmes to install the playhouse. Holmes then pulls two workers off the production line and sends them to construct the playhouse on site.
Required:
1. What two products does Holmes sell? Classify each one as a product or a service.
2. CONCEPTUAL CONNECTION Do you think Holmes assigns costs individually to each product or service? Why or why not?
3. CONCEPTUAL CONNECTION Describe the opportunity cost of the installation process.
Holmes Company produces wooden playhouses. When a customer orders a playhouse, it is delivered in pieces with detailed instructions on how to it together. Some customers prefer that Holmes put the playhouse together. Therefore, these customers purchase the playhouse, as well as pay an additional fee for Holmes to install the playhouse. Holmes then pulls two workers off the production line and sends them to construct the playhouse on site.
Required:
1. What two products does Holmes sell? Classify each one as a product or a service.
2. CONCEPTUAL CONNECTION Do you think Holmes assigns costs individually to each product or service? Why or why not?
3. CONCEPTUAL CONNECTION Describe the opportunity cost of the installation process.
Explanation
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Verified
1)
Holmes Company produces wooden playho...
Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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