Question

5 COST BEHAVIOR Saved Help Steve Silversmith produces unique and exclusive sterling silver rings, pendants, buckles, and chains. Steve pays one supervisor to oversee the work performed by several part-time silversmiths. He pays each silversmith to work 20 hours per week or 40 hours week, depending on production demand. He also hires a jewelry expert to perform quality assurance inspections and pays her based on the weight (per ounce of silver) of each piece inspected. The controller and the sales manager are discussing potential price increases due to the increasing cost of silver and increases in other costs. Required: The following are several costs they are discussing. Indicate whether each cost is a variable, fixed, step, or mixed cost within Steve's relevant range of activity. ces - Depreciation on production equipment. b. Supervisor salary c. Packaging (each piece is packaged in a designer carton). d. Silver Part-time labor (silversmith), 1. Production facility utilities. 9. Quality assurance h. Mortgage on the production facility e.

Answer 1

Solution Fixed fused Variable a. Depreciation om production equipment b. Supervisor salary c. Packaging leach piece is packaged in a d. silver e Part time labor (silversmith) f Production facility utilities designer cartons Variable Step fuxed Variable fined g. Quality assurance h. Mortgage on the production facility

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