Question: Baby Toys Co produces fine porcelain dolls that are sold

Baby Toys Co. produces fine porcelain dolls that are sold in exclusive gift shops. The controller and sales manager are discussing potential price increases and have started looking at various costs to consider their potential impact on price. The following are several of the costs they are discussing.
a. Advertising
b. Packaging (each doll is carefully packaged in a nicely designed collectible carton)
c. Supervisors’ salaries
d. Fabric used in production (each doll is adorned in unique fabrics)
e. Assembly labor
f. Mortgage payment on the production facility
g. Production facility utilities
h. Quality assurance (each doll is carefully inspected)

Assist the controller and sales manager by indicating whether each of the above costs is most likely a fixed cost (FC) or a variable cost (VC).

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  • CreatedMarch 11, 2015
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