Question:
Ivan Abuzi is a house painter. He incurred the following costs during August 2009, when he painted four houses. In the ï¬rst week of August, Abuzi placed a $60 classiï¬ed ad for his business in the newspaper. He also bought two pairs of coveralls for $35 each to wear while working. Abuzi spent $25 for a day-planner book in which he records hours spent at each job, mileage to and from jobs (at a rate of $0.32 per mile), information on referral work, and bids submitted for other jobs. Toll road charges for driving to various job locations were $0.75 for each section of toll road traveled. Cell phone charges for the month were $60; Abuzi has a cell phone plan that allows up to 2,000 minutes of nationwide calling, a time frame that he has never exceeded. Abuzi uses the cell phone for both business and personal calls. In August, approximately 40% of his calls were business related. Materials costs for the month were $500 for paint, $40 for mineral spirits, and $155 for brushes. Abuzi hired a helper who worked 15 hours at $18 per hour on one of Abuzis jobs. The insurance on Abuzis work truck is $50 per month.
Required:
Using the following headings, indicate how each of the August costs incurred by Abuzi would be classiï¬ed. Assume that the cost object is a house-painting job.
Transcribed Image Text:
Type of Cost Variable Fixed Direct Indirect Period Product