Question

For each of the numbered items, choose the appropriate classifications from the lettered items for a manufacturing company. If in doubt about whether the cost behavior is basically variable or fixed, decide on the basis of whether the total cost will fluctuate substantially over a wide range of volume. Most items have two answers among the following possibilities:
a. Manufacturing costs, direct
b. Manufacturing costs, indirect
c. General and administrative cost
d. Selling cost
e. Fixed cost
f. Variable cost
g. Other (specify)
Examples:
Direct material .... a, f
President’s salary ... c, e
Bond interest expense .. e, g
Items for your consideration:
1. Welding supplies
2. Salespersons’ commissions
3. Salespersons’ salaries
4. Supervisory salaries, production control
5. Supervisory salaries, assembly department
6. Supervisory salaries, factory storeroom
7. Factory power for machines
8. Fire loss
9. Sandpaper
10. Company picnic costs
11. Overtime premium, punch press
12. Idle time, assembly
13. Freight out
14. Property taxes
15. Paint for finished products
16. Heat and air conditioning, factory
17. Materials-handling labor, punch press
18. Straight-line depreciation, salespersons’ automobiles



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  • CreatedNovember 19, 2014
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