Classify costs Following is a list of various costs incurred in producing and selling college textbooks. With respect to the production and sale of textbooks, classify each cost as either variable, fixed, or mixed. 1. Art commission of $36,000 paid for use of art on textbook cover. 2. Sales commissions paid sales representatives based upon number of textbooks sold. 3. Electricity costs, $0.04 per kilowatt-hour. 4. Hourly wages of operators of printing presses. 5. Janitorial costs, $5,000 per month. 6. Packaging for customized texts and texts shipped with software codes. 7. Paper used in priming the textbooks. 8. Property insurance premiums, $1,800 per month plus $0.05 for each dollar of property over $2,000,000 9. Property taxes, $615,000 per year on factory building and equipment. 10. Rent on warehouse, $12,800 per month plus $2.50 per square foot of storage used. 11. Royalty paid authors for each textbook sold. 12. Salary of plant manager. 13. Sales commission paid lo Amazon.com of $ 100,000 plus $0.50 for each textbook sold online. 14. Straight-line depreciation on the production equipment. 15. Technology development costs of $1,200,000.
Classify costs Following is a list of various costs incurred in producing and selling college textbooks. With respect to the production and sale of textbooks, classify each cost as either variable, fixed, or mixed. 1. Art commission of $36,000 paid for use of art on textbook cover. 2. Sales commissions paid sales representatives based upon number of textbooks sold. 3. Electricity costs, $0.04 per kilowatt-hour. 4. Hourly wages of operators of printing presses. 5. Janitorial costs, $5,000 per month. 6. Packaging for customized texts and texts shipped with software codes. 7. Paper used in priming the textbooks. 8. Property insurance premiums, $1,800 per month plus $0.05 for each dollar of property over $2,000,000 9. Property taxes, $615,000 per year on factory building and equipment. 10. Rent on warehouse, $12,800 per month plus $2.50 per square foot of storage used. 11. Royalty paid authors for each textbook sold. 12. Salary of plant manager. 13. Sales commission paid lo Amazon.com of $ 100,000 plus $0.50 for each textbook sold online. 14. Straight-line depreciation on the production equipment. 15. Technology development costs of $1,200,000.
Solution Summary: The author explains how the cost classification for the production and selling of books is tabulated as per their nature and classified into variable, fixed and mixed cost.
Classify costs Following is a list of various costs incurred in producing and selling college textbooks. With respect to the production and sale of textbooks, classify each cost as either variable, fixed, or mixed. 1. Art commission of $36,000 paid for use of art on textbook cover. 2. Sales commissions paid sales representatives based upon number of textbooks sold. 3. Electricity costs, $0.04 per kilowatt-hour. 4. Hourly wages of operators of printing presses. 5. Janitorial costs, $5,000 per month. 6. Packaging for customized texts and texts shipped with software codes. 7. Paper used in priming the textbooks. 8. Property insurance premiums, $1,800 per month plus $0.05 for each dollar of property over $2,000,000 9. Property taxes, $615,000 per year on factory building and equipment. 10. Rent on warehouse, $12,800 per month plus $2.50 per square foot of storage used. 11. Royalty paid authors for each textbook sold. 12. Salary of plant manager. 13. Sales commission paid lo Amazon.com of $ 100,000 plus $0.50 for each textbook sold online. 14. Straight-line depreciation on the production equipment. 15. Technology development costs of $1,200,000.
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