Question

HSty p-to-date with security updates, fixes, and Improvements, choose Check for Updates McPeter's Yum-Yum Two couples, the Macks and the Petersons, have been neighbors for over 20 years. They discovered that the four of them have exceptional baking sklls. They have all traveled extensively, taken baking dlasses, and have each worked in respectable, prestigious bakeries and restaurants Over the years they have unted their baking sils and baking passions and have taken advantage of every opportunity to distribute their baked good to family and friends. It did not take long before their mere sharing of baked goods developed into orders. The Macks and Petersons found themselves in the catering business. That is wedding, parties, banquets, etc About three year ago, the McPeters Yum-Yum Company was legally formed and licensed to do business Demand grew such that their kitchens were deemed too small for business. They relocated to a much larger facility and have a small staff of workers. The Macks and Petersons expanded their operations to include private catering as well as placement in grocery stores. Consequently, they recently retained the services of Mario Paterson, a CPA, to assist them in managing the financial affairs of the company. The Macks and Petersons see a profitable future for McPeter's Yum-Yum Company. They have asked Mario to focus specifically on growth and profitablity Mario has determined that there is a need forá lot of cost analysis, especially regarding the determination of the cost of baking their specialty, cookies. His goal is to determine a product costing system that can be used for pricing decisions and product-line planning and budgeting. He has asked you, one of the administrative staff persons for McPeters Yum-Yum, to provide basic information that would serve as a starting point. You provided Exhibit 1 showing actual costs and revenue data for the month of September 2018 After receiving the information, Mario wants you to further (1) classify each of the expenses as either variable or fixed and (2) classify each expense as a product or period costs. He asked that you justify the classification you assign to each. >Write a memo to Mario in response to his request, Be sure to present your responses clearly. You may present exhibits to accompany your memo. 38 WordsE English (us) EEFocus MacBook Pro

Answer 1

Classify the costs into Variable or Fixed and Period or Product Costs? Answer: Fixed or variable Period or Product Variable Variable Cost Name Raw Materials Labor (Bakery) Salaries (Administrative) Fixed Supplies Shipping / Freight in Shipping Freight Out Variable Electricity Gas Water Maintainence and Repair Variable Rental Expenses Wireless and Telephone Fixed Salaries - Owners Sales Commission Expense Variable Product Product Period Product Product Product Product Product Product Product Period Period Period Period Variable Variable Variable Variable Variable Fixed Fixed