Question

Classify Costs Following is a list of various costs incurred in producing replacement automobile parts. With respect to the production and sale of these auto parts, classify each cost as variable, fixed, or mixed. 1. Cost of labor for hourly workers 2. Factory cleaning costs, $6,000 per month 3. Hourly wages of machine operators 4. Computer chip (purchased from a vendor) 5. Electricity costs, $0.20 per kilowatt-hour 6. Metal 7. Salary of plant manager 8. Property taxes, 165,000 per year on factory building and equipmel 9. Plastic 10. Oil used in manufacturing equipment 11. Rent on warehouse, $10,000 per month plus $25 per square foot of storage used 12. Property insurance premiums, $3,600 per month plus $0.01 for each dollar of property over $1,200,000 13. Straight-line depreciation on the production equipment 14. Pension cost, $1.00 per employee hour on the job 15. Packaging Check My Work 2 more Check My Work uses remaining. Next Email Instructor Save and Exit Submit Assignment for Gradina

Answer 1

• 3 © cost of labour for hourly workers is a variable cost- The cost would change with the change in the number of hours worked. Factory cleaning cost, $6000 per month is a fixed cost The amount of cleaning cost remain constant as it is not affected by no. of units produced or sold. Hourly wages of machine operators is a variable cost. The cost would change with the change in the number of hours worked. computer chip (purchased from a vendoy) is a variable cost. The cost would change with the change in the number of Units to be produced Electricity cost of $ .28 per kw hour is a variable cost. The cost would change with the change in the number of hours the factory and the machines ved for production metal is a variable cost. The cost would change with the change in the number of units to be produced salary of plant manager is a fixed cost. The cost remains constant irrespective of number of units produced or sold sty taxes, &165,000 per year on factory building and equipment as a fixed cost to the the cost would remain constant inespective @ number of mits produced or sold out plastic is a variable cost. The cost would change with the change in number of units to be produced the

oil used in manufacturing equipment is a variable cost o The cost changes with the change in the number of units to be produced Rent on ware house, $10,000 per month plus $25 per A square foot of storage used is a mixed cost property insurance premiums, $3600 per month plus $0.01 for each dollar of property over $ 1,200,000 is a mixed cost 3 straight line depreciation on the production equipment is a fixed cost. The cost remains constant irrespective of units produced 14 pension cost $1.00 per employee hour on the job is a fixed cost. 5 packaging is a varfáble cost. The cost would change with the change in the number of units to be prodmed.

Answer 2

Number 14 is a Variable Cost not Fixed