Classify Costs Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue jeans: Required: Identify each cost listed below as variable costs, fixed costs, or mixed cost. A. Shipping boxes used to ship orders B. Consulting fee of $200,000 paid to industry specialist for marketing advice C. Straight-line depreciation on sewing machines D. Salesperson's salary, $10,000 plus 2% of the total sales E. Fabric F. Dye G. Thread H. Salary of designers I. Brass buttons J. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour K. Insurance premiums on property, plant, and equipment, $70,000 per year plus $5 per $30,000 of insured value over $8,000,000 L. Rental costs of warehouse, $5,000 per month plus $4 per square foot of storage used M. Supplies N. Leather for patches identifying the brand on individual pieces of apparel O. Rent on plant equipment, $50,000 per year P. Salary of production vice president Q. Janitorial services, $2,200 per month R. Wages of machine operators S. Electricity costs of $0.10 per kilowatt-hour T. Property taxes on property, plant, and equipment

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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Classify Costs

Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue jeans:

Required:

Identify each cost listed below as variable costs, fixed costs, or mixed cost.

A. Shipping boxes used to ship orders
B. Consulting fee of $200,000 paid to industry specialist for marketing advice
C. Straight-line depreciation on sewing machines
D. Salesperson's salary, $10,000 plus 2% of the total sales
E. Fabric
F. Dye
G. Thread
H. Salary of designers
I. Brass buttons
J. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour
K. Insurance premiums on property, plant, and equipment, $70,000 per year plus $5 per $30,000 of insured value over $8,000,000
L. Rental costs of warehouse, $5,000 per month plus $4 per square foot of storage used
M. Supplies
N. Leather for patches identifying the brand on individual pieces of apparel
O. Rent on plant equipment, $50,000 per year
P. Salary of production vice president
Q. Janitorial services, $2,200 per month
R. Wages of machine operators
S. Electricity costs of $0.10 per kilowatt-hour
T. Property taxes on property, plant, and equipment

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