Various costs associated with the operation of factories are given below:
1. Electricity used in operating machines.
2. Rent on a factory building.
3. Cloth used to drapery production.
4. Production superintendent’s salary.
5. Wages of laborers assembling a product.
6. Depreciation of air purification equipment used in furniture production.
7. Janitorial salaries.
8. Peaches used in canning fruit.
9. Lubricants needed for machines.
10. Sugar used in soft-drink production.
11. Property taxed on the factory.
12. Wages of workers painting a product.
13. Depreciation on cafeteria equipment.
14. Insurance on a building used in producing helicopters.
15. Cost of rotor blades used in producing helicopters.
Classify each cost as wither variable or fixed with respect to the number of units produced and sold. Also indicate whether each cost would typically be treated as a direct cost or an indirect cost with respect to units of product. Prepare your answer sheet as shown below:
Cost Behavior To Units of Product
Cost Item Variable Fixed Direct Indirect
Example: Factory insurance x x

  • CreatedMarch 15, 2011
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