Below are listed various costs that are found in organizations.

1. Hamburger buns in a Wendy's outlet.

2 Advertising by a dental office.

3. Apples processed and canned by Del Monte.

4. Shipping canned apples from a Del Monte plant to customers.

5. Insurance on a Bausch & Lomb factory producing contact lenses.

6. Insurance on IBM's corporate headquarters.

7. Salary of a supervisor overseeing production of printers at Hewlett-Packard.

8. Commissions paid to automobile salespersons.

9. Depreciation of factory lunchroom facilities at a General Electric plant.

10. Steering wheels installed in BMWs.

Required:

Classify each cost as being either variable or fixed with respect to the number of units produced and sold. Also classify each cost as either a selling and administrative cost or a product cost. Prepare your answer sheet as shown below. Place an X in the appropriate columns to show the proper classification of each cost.

Transcribed Image Text:

Cost Item Cost Behavior Variable Fixed Period (Selling and Administrative) Cost Product Cost Cost Item Cost Behavior Variable Fixed Period (Selling and Administrative) Cost Product Cost

Answer rating: 100% (QA)

Fixed cost refers to those costs which remain the same for the every level of outputs For example the total amount of rent paid is the same irrespective of the electricity bill Variable cost Variable ... View the full answer