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Cape Cod Shirt Shop manufactures T-shirts and decorates them with custom designs for retail sale on the premises. Several costs incurred by the company are listed below. For each cost, indicate which of the following classifications best describe the cost. More than one classification may apply to the same cost item. For purposes of classifying costs as fixed or variable, assess cost behavior relative to the output quantity of finished T-shirts. (If your answer is "No" leave the cells blank.) Cost Items 1. Cost of fabric used in T-shirts. 2. Wages of shirtmakers. 3. Cost of new sign in front of retail T-shirt shop. 4. Wages of the employee who repairs the firm's sewing machines. 5. Cost of electricity used in the sewing department. 6. Wages of T-shirt designers and painters. Variable or Fixed? 12. Cost of hiring a pilot to fly along the beach pulling a banner advertising the shop. 13. Salary of the owner's secretary 14. Cost of repairing the gas furnace. 15. Cost of insurance for the production employees. Variable Variable Fixed Fixed Variable Variable Fixed Fixed 7. Wages of sales personnel. 8. Depreciation on sewing machines. Rent on the building. Part of the building's first floor is used to make and paint T-shirts. Part of it is used for the retail sales shop. The second floor Fixed 9. is used for administrative offices and storage of raw material and finished goods 10. Cost of daily advertisements in local media. Fixed 11. Wages of designers who experiment with new fabrics, paints, and T-shirt Fixed Variable Fixed Fixed Fixed Period or Product? Product Product Period Product Product Product Period Product Both Period and Product Period Product Period Period Product Product Administrative? Selling? Manufacturing? Research and Development? Direct material, Direct labor, or Manufacturing overhead? Direct material Direct labor Manufacturing overhead Manufacturing overhead Direct labor Manufacturing overhead Manufacturing overhead Manufacturing overhead Manufacturing overhead

Cape Cod Shirt Shop manufactures T-shirts and decorates them with custom designs for retail sale on the premises. Several costs incurred by the company are listed below. For each cost, indicate which of the following classifications best describe the cost. More than one classification may apply to the same cost item. For purposes of classifying costs as fixed or variable, assess cost behavior relative to the output quantity of finished T-shirts. (If your answer is "No" leave the cells blank.) Cost Items 1. Cost of fabric used in T-shirts. 2. Wages of shirtmakers. 3. Cost of new sign in front of retail T-shirt shop. 4. Wages of the employee who repairs the firm's sewing machines. 5. Cost of electricity used in the sewing department. 6. Wages of T-shirt designers and painters. Variable or Fixed? 12. Cost of hiring a pilot to fly along the beach pulling a banner advertising the shop. 13. Salary of the owner's secretary 14. Cost of repairing the gas furnace. 15. Cost of insurance for the production employees. Variable Variable Fixed Fixed Variable Variable Fixed Fixed 7. Wages of sales personnel. 8. Depreciation on sewing machines. Rent on the building. Part of the building's first floor is used to make and paint T-shirts. Part of it is used for the retail sales shop. The second floor Fixed 9. is used for administrative offices and storage of raw material and finished goods 10. Cost of daily advertisements in local media. Fixed 11. Wages of designers who experiment with new fabrics, paints, and T-shirt Fixed Variable Fixed Fixed Fixed Period or Product? Product Product Period Product Product Product Period Product Both Period and Product Period Product Period Period Product Product Administrative? Selling? Manufacturing? Research and Development? Direct material, Direct labor, or Manufacturing overhead? Direct material Direct labor Manufacturing overhead Manufacturing overhead Direct labor Manufacturing overhead Manufacturing overhead Manufacturing overhead Manufacturing overhead

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cape Cod Shirt Shop manufactures T-shirts and decorates them with custom designs for retail sale on the premises. Several costs incurred by the company are listed below. For each cost, indicate which of the following classifications best describe the cost. More than one classification may apply to the same cost item. For purposes of classifying costs as fixed or variable, assess cost behavior relative to the output quantity of finished T-shirts. (If your answer is "No" leave the cells blank.) Cost Items 1. Cost of fabric used in T-shirts. 2. Wages of shirtmakers. 3. Cost of new sign in front of retail T-shirt shop. 4. Wages of the employee who repairs the firm's sewing machines. 5. Cost of electricity used in the sewing department. 6. Wages of T-shirt designers and painters. 7. Wages of sales personnel. 8. Depreciation on sewing machines. 9. Rent on the building. Part of the building's first floor is used to make and paint T-shirts. Part of it is used for the retail sales shop. The second floor is used for administrative offices and storage of raw material and finished goods. 10. Cost of daily advertisements in local media. 11. Wages of designers who experiment with new fabrics, paints, and T-shirt designs. 12. Cost of hiring a pilot to fly along the beach pulling a banner advertising the shop. 13. Salary of the owner's secretary. 14. Cost of repairing the gas furnace. 15. Cost of insurance for the production employees. Variable or Fixed? Variable Variable Fixed Fixed Variable Variable Fixed Fixed Fixed Fixed Fixed Variable Fixed Fixed Fixed Period or Product? Product Product Period Product Product Product Period Product Both Period and Product Period Product Period Period Product Product Administrative? Selling? Manufacturing? Research and Development? Direct material, Direct labor, or Manufacturing overhead? Direct material Direct labor Manufacturing overhead Manufacturing overhead Direct labor Manufacturing overhead Manufacturing overhead Manufacturing overhead Manufacturing overhead
Transcribed Image Text:Cape Cod Shirt Shop manufactures T-shirts and decorates them with custom designs for retail sale on the premises. Several costs incurred by the company are listed below. For each cost, indicate which of the following classifications best describe the cost. More than one classification may apply to the same cost item. For purposes of classifying costs as fixed or variable, assess cost behavior relative to the output quantity of finished T-shirts. (If your answer is "No" leave the cells blank.) Cost Items 1. Cost of fabric used in T-shirts. 2. Wages of shirtmakers. 3. Cost of new sign in front of retail T-shirt shop. 4. Wages of the employee who repairs the firm's sewing machines. 5. Cost of electricity used in the sewing department. 6. Wages of T-shirt designers and painters. 7. Wages of sales personnel. 8. Depreciation on sewing machines. 9. Rent on the building. Part of the building's first floor is used to make and paint T-shirts. Part of it is used for the retail sales shop. The second floor is used for administrative offices and storage of raw material and finished goods. 10. Cost of daily advertisements in local media. 11. Wages of designers who experiment with new fabrics, paints, and T-shirt designs. 12. Cost of hiring a pilot to fly along the beach pulling a banner advertising the shop. 13. Salary of the owner's secretary. 14. Cost of repairing the gas furnace. 15. Cost of insurance for the production employees. Variable or Fixed? Variable Variable Fixed Fixed Variable Variable Fixed Fixed Fixed Fixed Fixed Variable Fixed Fixed Fixed Period or Product? Product Product Period Product Product Product Period Product Both Period and Product Period Product Period Period Product Product Administrative? Selling? Manufacturing? Research and Development? Direct material, Direct labor, or Manufacturing overhead? Direct material Direct labor Manufacturing overhead Manufacturing overhead Direct labor Manufacturing overhead Manufacturing overhead Manufacturing overhead Manufacturing overhead
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