New Age Furniture Company manufactures sofas for distribution to several major retail chains. The following costs are incurred in the production and sale of sofas:

a. Salary of production vice president

b. Rental costs of warehouse, $20,000 per month

c. Consulting fee of $100,000 paid to efficiency specialists

d. Janitorial supplies, $25 for each sofa produced

e. Employer?s FICA taxes on controller?s salary of $200,000

f. Hourly wages of sewing machine operators

g. Salary of designers

h. Foam rubber for cushion fillings

i. Straight-line depreciation on factory equipment

j. Cartons used to ship sofas

k. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $20,000 plus $150 per hour

l. Property taxes on property, plant, and equipment

m. Springs

n. Electricity costs of $0.15 per kilowatt-hour

o. Sewing supplies

p. Fabric for sofa coverings

q. Salesperson?s salary, $70,000 plus 5% of the selling price of each sofa sold

r. Insurance premiums on property, plant, and equipment, $20,000 per year plus $20 per $20,000 of insured value over $15,000,000

s. Rent on experimental equipment, $45 for every sofa produced

t. Wood for framing the sofas

Instructions

Classify the preceding costs as either fixed, variable, or mixed. Use the following tabular headings and place an ?X? in the appropriate column. Identify each cost by letter in the Cost column.?

Transcribed Image Text:

Fixed Cost Variable Cost Mixed Cost Cost