Various costs, as given below, are associated with running a commercial bakery that supplies baked goods to local coffee shops:

1. Account manager?s salary.

2. Rent on building.

3. Flour used in the making of croissants.

4. Bakery manager?s salary.

5. Wages of bakers who are paid on a piecework basis.

6. Depreciation of commercial ovens used in baking.

7. Insurance on the building.

Required:

Classify each cost as being either variable or fixed with respect to the quantity of baked goods supplied. Also, indicate whether each cost would typically be treated as a direct cost or an indirect cost with respect to the quantity of baked goods supplied. Prepare your answer sheet as shown below:

Transcribed Image Text:

To Quantity of Baked Goods Supplied Cost Behaviour Cost Item Variable Fixed Direct Indirect