Chapter 18, Problem 2E

To determine

Variable cost is the cost which remains constant per unit of output. It increases in direct proportion to the level of activity.

Fixed cost is the cost which remains constant in totality at each level of activity.

Indirect cost is the cost which cannot be directly attributed to the production of specific goods or services such as administrative expenses.

Direct cost is the cost which can be directly attributed to the production of specific goods or services.

To determine:

In the question we have given the product cost of Soccer balls.

1) We have to classify the product cost as

a) Either variable or fixed

b) Either direct or indirect

2) Relation between the costs classified above