Question

Problem 1-23 Cost Classification [LO1-1, LO1-3, L01-4] Listed below are costs found In varlous organizations Required For each cost Item, Indicate whether It would be variable or fixed with respect to the number of units produced and sold, and then whether t would be a selling cost, an administrative cost, or a manufacturing cost. If It is a manufacturing cost, Indicate whether It is a direct cost or an Indirect cost with respect to units of product. Manufacturing (Product) Cost Variable or Fixed Variable Fixed Fixed Fixed Variabl Variable Fixed Fixed Variable Fixed Variable Fixed Variable Variable Fixed Variable Fixed Variable Variable Variable Fixed Cost Item Selling Cost Administrative Direct Indirect Cost Ex. Direct labor Yes Executive salaries Yes Factory rent Yes 1. Property taxes, factory 2. Boxes used for packaging detergent produced by the company 3. Salespersons' commissions 4. Supervisor's salary, factory 5. Depreciation, executive autos 6. Wages of workers assembling computers 7. Insurance, finished goods warehouses 8. Lubricants for production equipment. 9. Advertising costs 10. Microchips used in producing calculators 11. Shipping costs on merchandise sold 12. Magazine subscriptions, factory lunchroomm 13. Thread in a garment factory 14. Executive life insurance 15. Ink used in textbook production 16. Fringe benefits, materials handling workers 17. Yarn used in sweater production 18. Wages of receptionist, executive offices Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Answer 1