Question

Classify each cost as being either variable or fixed with respect to the number of units produced and sold. Also classify each cost as either a period or a product cost. Cost Item Predicting Cost Behavior Preparing Financial Statements 1. Hamburger buns in a Wendy's restaurant. 2. Advertising by a dental office Apples processed and canned by Del Monte 4 Shipping canned apples from a Del Monte plant to customers Insurance on a Bausch & Lomb factory producing contact lenses 6. Insurance on IBM's corporate headquarters Salary of a supervisor overseeing production of printers at Hewlett- Packard 8. Commissions paid to automobile salespersons 9. Depreciation of factory lunchroom facilities at a General Electric plant 10. Steering wheels installed in BMW

Answer 1

	Cost Item	Predicting Cost Behavior	Preparing Financial Statements
1.	Hamburger buns in a Wendy's restaurant.	Variable	Product cost
2.	Advertising by a dental office.	Fixed	Period cost
3.	Apples processed and canned by Del Monte.	Variable	Product cost
4.	Shipping canned apples from a DelMonte plant to customers.	Variable	Period cost
5.	Insurance on a Bausch & Lombfactory producing contact lenses.	Fixed	Product cost
6.	Insurance on IBM's corporate headquarters.	Fixed	Period cost
7.	Salary of a supervisor overseeing production of printers at Hewlett-Packard.	Fixed	Product cost
8.	Commissions paid to automobile salespersons.	Variable	Period cost
9.	Depreciation of factory lunchroom facilitiesat a General Electric plant.	Fixed	Product cost
10.	Steering wheels installed in BMWs.	Variable	Product cost