**Identifying Fixed and Variable Costs**For each of the following costs, identify whether it is a Fixed, Variable, or Both:| Cost | Type ||----------------------------------------------|------------|| 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 | |This table lists various costs that need to be categorized as either Fixed, Variable, or both. Here’s a brief overview of what these terms mean:- **Fixed Costs**: Costs that do not change with the level of production or sales.- **Variable Costs**: Costs that vary directly with the level of production or sales.- **Both**: Some costs might have both fixed and variable characteristics.Please fill in the table by determining which category each cost falls into based on your financial knowledge and context:1. **Wages of assembly-line workers**: This cost could be variable since it might depend on the production level.2. **Depreciation—office equipment**: Typically, this is a fixed cost since it doesn’t change with production levels.3. **Glue and fasteners**: Usually, a variable cost as it directly correlates with the amount of production.4. **Delivery costs**: This could vary depending on the orders and production levels, making it a variable cost.5. **Raw materials handling costs**: Generally variable, as they fluctuate with the amount of raw materials used.6. **Salary of marketing manager**: This would typically be a fixed cost as it stays constant irrespective of production levels.7. **Production run setup costs**: Could be considered fixed if they do not vary with production levels, but in some contexts, they can have variable components.8. **Plant utilities**: These might have both fixed and variable components. The base utility cost can be fixed, while the usage part might be variable.9. **Electricity cost of manufacturing plant**: Often a mixed cost, with a base fixed fee and a variable component depending on the usage.10. **Research and development expenses**: Generally a fixed cost, as it does not directly vary with production

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

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

**Identifying Fixed and Variable Costs**

For each of the following costs, identify whether it is a Fixed, Variable, or Both:

| Cost | Type |
|----------------------------------------------|------------|
| 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 | |

This table lists various costs that need to be categorized as either Fixed, Variable, or both. Here’s a brief overview of what these terms mean:
- **Fixed Costs**: Costs that do not change with the level of production or sales.
- **Variable Costs**: Costs that vary directly with the level of production or sales.
- **Both**: Some costs might have both fixed and variable characteristics.

Please fill in the table by determining which category each cost falls into based on your financial knowledge and context:

1. **Wages of assembly-line workers**: This cost could be variable since it might depend on the production level.
2. **Depreciation—office equipment**: Typically, this is a fixed cost since it doesn’t change with production levels.
3. **Glue and fasteners**: Usually, a variable cost as it directly correlates with the amount of production.
4. **Delivery costs**: This could vary depending on the orders and production levels, making it a variable cost.
5. **Raw materials handling costs**: Generally variable, as they fluctuate with the amount of raw materials used.
6. **Salary of marketing manager**: This would typically be a fixed cost as it stays constant irrespective of production levels.
7. **Production run setup costs**: Could be considered fixed if they do not vary with production levels, but in some contexts, they can have variable components.
8. **Plant utilities**: These might have both fixed and variable components. The base utility cost can be fixed, while the usage part might be variable.
9. **Electricity cost of manufacturing plant**: Often a mixed cost, with a base fixed fee and a variable component depending on the usage.
10. **Research and development expenses**: Generally a fixed cost, as it does not directly vary with production

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