Answer Why is it important to know if a cost ofproduction is fixed or variable? Which oneof the following is an example of a periodcost? A. A change in benefits for the unionworkers who work in the New York plant of aFortune 1,000 manufacturer. B. Workers'compensation insurance on factory workers'wages allocated to the factory. C. A box costassociated with computers. D. A manager'ssalary for work that is done in the corporatehead office. Discuss the role of strategiccost management in the operations of anorganization.

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4PA: Listed as follows are various costs found in businesses. Classify each cost as a fixed or variable...

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Why is it important to know if a cost of production is fixed or variable? Which one of the following is an example of a period cost? A. A change in benefits for the union workers who work in the New York plant of a Fortune 1,000 manufacturer. B. Workers' compensation insurance on factory workers' wages allocated to the factory. C. A box cost associated with computers. D. A manager's salary for work that is done in the corporate head office. Discuss the role of strategic cost management in the operations of an organization.
Which one of the following is an example of a period cost? A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer. Workers' compensation insurance on factory workers' wages allocated to the factory. A box cost associated with computers. A manager's salary for work that is done in the corporate head office.
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Company XYZ hired Ali as a factory security guard. The company agreed to pay Ali based on the number of shift hours he works. The salary of Ali can be classified as: Select one: O a. A variable direct labor cost O b. A fixed selling and administrative cost O c. A variable selling and administrative cost O d. A fixed manufacturing overhead cost O e. A variable manufacturing overhead cost
Which of the following is an “indirect labor” cost? Wages paid to factory janitors and factory security guards. Salaries paid to human resources (HR) personnel. All of the listed choices are correct. Wages paid to factory employees who convert raw materials into work-in-process and finished goods. Sales salaries and commissions paid to salespeople.
The ________ is the hourly price charged to clients for professional labor. salary rate billing rate wage rate job rate
Which one of the following best describes a job cost sheet? A. It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job. B. It is used to track manufacturing overhead costs for specific jobs. C. It is used by management to understand how direct costs affect profitability. D. It is a daily form that management uses for tracking worker productivity on which employee raises are based.
Rent on the Administrative building would be? O DM O DL о мон O MOH O elling & Administrative
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Carver Company uses a plantwide overhead rate based on direct labor costs. Suppose that Carver raises its wage rate for direct labor during the year. How would that affect the overhead applied? The total cost of jobs?
Darnell Poston, owner of Poston Manufacturing, Inc., wants to determine the cost behavior of labor and overhead. Darnell pays his workers a salary; during busy times, everyone works to get the orders out. Temps (temporary workers hired through an agency) may be hired to pack and prepare completed orders for shipment. During slower times, Darnell catches up on bookkeeping and administrative tasks while the salaried workers do preventive maintenance, clean the lines and building, etc. Temps are not hired during slow times. Darnell found that workers salaries, temp agency payments, rentals, utilities, and plant and equipment depreciation are the largest dollar accounts. He believes that workers salaries and plant and equipment depreciation are fixed, temp agency payments are associated with the number of orders (since temp workers are used to pack and prepare completed orders for shipment), and electricity is associated with the number of machine hours. When the number of different parts stored by Poston exceeds the space in the materials storeroom, Darnell rents nearby warehouse space. He can rent as much or as little space as he wants on a month-to-month basis. Therefore, he believes warehouse rental payments are variable with the number of parts purchased and stored. The account balances for the past six months as well as the six-month total are as follows: Information on number of machine hours, orders, and parts for the six-month period follows: Required: 1. Calculate the monthly average account balance for each account. Calculate the average monthly amount for each of the three drivers. 2. Calculate fixed monthly cost and the variable rates for temp agency payments, warehouse rent, and electricity. Express the results in the form of an equation for total cost. 3. In July, Darnell predicts there will be 420 orders, 250 parts, and 5,900 machine hours. What is the total labor and overhead cost for July? 4. What if Darnell buys a new machine in July for 24,000? The machine is expected to last 10 years and will have no salvage value at the end of that time. What part of the cost equation will be affected? How? What is the new expected cost in July?

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