Chapter 21, Problem S21.1SE

Identifying variable, fixed, and mixed costs

Learning Objective 1

Philadelphia Acoustics builds innovative speakers for music and home theater systems. Identify each cost as variable (V), fixed (F), or mixed (M),relative to number of speakers produced and sold.

1. Units of production depreciation on routers used to cut wood enclosures.
2. Wood for speaker enclosures.
3. Patents on crossover relays.
4. Total compensation to salesperson who receives a salary plus a commission based on meeting sales goals.
5. Crossover relays.
6. Straight-line depreciation on manufacturing plant.
7. Grill cloth.
8. Insurance on the corporate office.
9. Glue.
10. Quality inspector's salary.