# Cost Classification Table**Instructions:**Classify each of the following costs as Product (direct/indirect) or Period and Variable, Fixed, or Mixed. ## Costs and Classifications| Costs | Product (Direct/Indirect) or Period | Variable/Fixed/Mixed ||------------------------------------|------------------------------------|----------------------|| Wages of assembly-line workers | | || Depreciation of plant equipment | | || Glue and nails for production | | || Outbound delivery expense | | || Raw materials handling costs | | || Salary of marketing manager | | || Production run setup costs | | || Administrative office utilities | | || Electricity cost of retail stores | | || Research and development expense | | |The table above is designed to help students classify different types of costs typically encountered in manufacturing and business operations. Each cost needs to be classified into two different categories:1. **Product (Direct/Indirect) or Period:** - **Product Costs:** Costs that are necessary to produce a finished product. - **Direct Costs:** Easily traced to the product (e.g., direct materials, direct labor). - **Indirect Costs:** Cannot be directly traced to a product (e.g., manufacturing overhead). - **Period Costs:** Non-manufacturing costs that are expensed within the period they are incurred (e.g., selling and administrative expenses).2. **Variable/Fixed/Mixed Costs:** - **Variable Costs:** Change in proportion to the level of production or sales volume. - **Fixed Costs:** Do not change with the level of production or sales within a certain range. - **Mixed Costs:** Contain both variable and fixed cost components.Use this table as a tool to enhance your understanding of cost classification, which is fundamental in cost accounting and management accounting. By accurately classifying costs, businesses can better control expenses and make more informed financial decisions.

1. Product costs are the costs directly incurred from the manufacturing process. Product costs are…

Classify each of the following costs as Product (direct/indirect) or Period and Variable, Fixed or Mixed. Costs Wages of assembly-line workers Depreciation of plant equipment Glue and nails for production Outbound delivery expense Raw materials handling costs Salary of marketing manager Production run setup costs Administrative office utilities Electricity cost of retail stores Research and development expense Product (Direct/Indirect) or Period Variable/Fixed/Mi

Classify each of the following costs as Product (direct/indirect) or Period and Variable, Fixed or Mixed. Costs Wages of assembly-line workers Depreciation of plant equipment Glue and nails for production Outbound delivery expense Raw materials handling costs Salary of marketing manager Production run setup costs Administrative office utilities Electricity cost of retail stores Research and development expense Product (Direct/Indirect) or Period Variable/Fixed/Mi

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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For each of the following costs, identify whether it is a Fixed, Variable or Both: Cost Wages of assembly-line workers Depreciation-office equipment Glue and fasteners Delivery costs Raw materials handling costs Salary of marketing manager Production run setup costs Plant utilities Electricity cost of manufacturing plant Research and development expenses Type
Indicate whether each cost is: A. Fixed or Variable b. Selling, General/Administrative, or Manufacturing
Concepts and Terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Sentence a. An example of factory overhead is b. Direct materials costs combined with direct labor costs are called c. Long-term plans are called d. Advertising costs are usually viewed as plans. costs. costs. e. The management process by which management monitors operations by comparing actual and expected results is f. The plant manager's salary would be considered to the product. g. The salaries of factory supervisors are normally considered a cost.
1. Property taxes on a manufacturing plant is an element of: a. Conversion cost b. Prime cost c. Period cost d. Fixed cost 2. Factory supplies for manufacturing plant are generally a. Prime cost b. Fixed cost c. Period cost d. Variable cost 3. Wages paid to timekeeper in a factory is a a. Prime cost b. Direct Material c. Conversion cost d. Direct labor
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Which of the following is an example of a variable cost? a.Insurance on the production equipment b.Direct materials c.The production supervisor's salary d.Depreciation of the factory building e.None of these
Under variable costing, which of the following costs would not be included in finished goods inventory? a. electricity used by factory machinery b. steel costs for a machine tool manufacturer c. salary of factory supervisor d. wages of machine operator