Question

Cost Classification

Classify each of the following costs relative to the cost object “customer” for a clothing retailer:

	Product or Period	Variable, Fixed, or Mixed	Direct or Indirect
Salesperson wages	Answer	Answer	Answer
Store manager salary	Answer	Answer	Answer
Depreciation on furniture and fixtures	Answer	Answer	Answer
Cost of merchandise	Answer	Answer	Answer
Online advertising	Answer	Answer	Answer
Cost of discount coupon	Answer	Answer	Answer
Store lease expense	Answer	Answer	Answer

Answer 1

Ans:

Cost Items	Product or	Variable,	Direct or
	Period	Fixed, or	Indirect
		Mixed
Salesperson wages	Period	Fixed	Neither
Store manager salary	Period	Fixed	Neither
Depreciation on furniture and fixtures	Period	Fixed	Neither
Cost of merchandise	Product	Variable	Direct
Online advertising	Period	Fixed	Neither
Cost of discount coupon	Period	Fixed	Neither
Store lease expense	Period	Fixed	Neither