Question: Various costs associated with the operation of factories are giv

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.
Required:
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



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  • CreatedMarch 15, 2011
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