Listed below are costs found in various organizations. Required: For each cost item, Indicate whether it would be variable or fixed with respect to the number of units produced and sold; and then whether it would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost, indicate whether it is a direct cost or an Indirect cost with respect to units of product. Cost Item Example: Direct labor Example: Executive salaries Example: Factory rent 1. Property taxes, factory. 2. Boxes used for packaging detergent produced by the company. 3. Salespersons' commissions. 4. Supervisor's salary, factory. 5. Depreciation, executive autos. 6. Wages of workers assembling computers. 7. Insurance, finished goods warehouses. 8. Lubricants for production equipment. 9. Advertising costs. 10. Microchips used in producing calculators. 11. Shipping costs on merchandise sold. 12. Magazine subscriptions, factory lunchroom. 13. Thread in a garment factory. 14. Executive life insurance. 15. Ink used in textbook production. 16. Fringe benefits, materials handling workers. 17. Yarn used in sweater production. 18. Wages of receptionist, executive offices. Variable or Fixed Selling Cost Administrative Cost Manufacturing Manufacturi (Product) Cost (Product) C Direct InDirect Variable Yes Fixed Fixed Yes Yes
Listed below are costs found in various organizations. Required: For each cost item, Indicate whether it would be variable or fixed with respect to the number of units produced and sold; and then whether it would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost, indicate whether it is a direct cost or an Indirect cost with respect to units of product. Cost Item Example: Direct labor Example: Executive salaries Example: Factory rent 1. Property taxes, factory. 2. Boxes used for packaging detergent produced by the company. 3. Salespersons' commissions. 4. Supervisor's salary, factory. 5. Depreciation, executive autos. 6. Wages of workers assembling computers. 7. Insurance, finished goods warehouses. 8. Lubricants for production equipment. 9. Advertising costs. 10. Microchips used in producing calculators. 11. Shipping costs on merchandise sold. 12. Magazine subscriptions, factory lunchroom. 13. Thread in a garment factory. 14. Executive life insurance. 15. Ink used in textbook production. 16. Fringe benefits, materials handling workers. 17. Yarn used in sweater production. 18. Wages of receptionist, executive offices. Variable or Fixed Selling Cost Administrative Cost Manufacturing Manufacturi (Product) Cost (Product) C Direct InDirect Variable Yes Fixed Fixed Yes Yes
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Listed below are costs found In varlous organizations.
Requlred:
For each cost item, Indicate whether It would be varlable or fixed with respect to the number of units produced and sold; and
then whether It would be a selling cost, an administrative cost, or a manufacturing cost. If It Is a manufacturing cost, Indicate
whether It is a direct cost or an Indirect cost with respect to units of product.
Variable or
Fixed
Administrative
Cost
Manufacturing Manufacturin
(Product) Cost (Product) Co
Cost Item
Selling Cost
Direct
InDirect
Example: Direct labor
Example: Executive salaries
Example: Factory rent
1. Property taxes, factory.
2. Boxes used for packaging detergent produced by the company.
3. Salespersons' commissions.
4. Supervisor's salary, factory.
5. Depreciation, executive autos.
6. Wages of workers assembling computers.
7. Insurance, finished goods warehouses.
8. Lubricants for production equipment.
9. Advertising costs.
10. Microchips used in producing calculators.
11. Shipping costs on merchandise sold.
12. Magazine subscriptions, factory lunchroom.
13. Thread in a garment factory.
14. Executive life insurance.
15. Ink used in textbook production.
16. Fringe benefits, materials handling workers.
17. Yarn used in sweater production.
18. Wages of receptionist, executive offices.
Variable
Yes
Fixed
Yes
Fixed
Yes
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