CHECK FIGURE Boxes for packaging: variable direct PROBLEM 2-2 Classifying Costs [LO1 - CC1; L02 - CC2; L04 - CC4, 5, 6] Following are a number of costs typically found in organizations: 1. Property taxes, factory. 2. Boxes used for packaging detergent. 3. Salespeople's commissions. 4. Supervisor's salary, factory. 5. Depreciation, executive automobiles 6. Wages of workers assembling computers. 7. Packing supplies for out-of-province shipments. 8. Insurance, finished goods warehouses. 9. Lubricants for machines. 10. Advertising costs. 11. Chips used in producing calculators. 12. Shipping costs on merchandise sold. 13. Magazine subscriptions, factory lunchroom. 14. Thread in a garment factory. 14. Thread in a garment factory 15. Billing costs. 16. Executive life insurance. 17. Ink used in textbook production 18, Fringe benefits, assembly-line workers. 19. Yarn used in sweater production 20. Wages of receptionist, executive offices. Required: Prepare an answer sheet with column headings as shown below. For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold and then whether it would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost, indicate whether it would typically be treated as a direct cost or an indirect cost with respect to units of product. Three sample answers are provided for illustration Manufacturing (Product) Cost Variable Selling Administrative Cost Item or Fixed Cost Cost Direct Indirect Direct labour V X Executive F salaries 63 Factory rent F