EXERCISE 2-11 Classification of Costs as Variable or Fixed, and as Selling and

Administrative or Product [LO2, LO5]

Below are listed various costs that are found in organizations:

1. The costs of turn signal switches used at a General Motors plant. These are installed in

the steering columns assembled at the plant.

2. The salary of the manager in charge of production at BlackBerry .

3. Salespeople's commissions at Avon Products, a company that sells cosmetics door to door.

4. Insurance on one of Bombardier's factory buildings.

5. The costs of shipping brass fittings from Graham Manufacturing's plant in British

Columbia to customers in California.

6. Depreciation on the bookshelves at Reston Bookstore.

7. The costs of X-ray film at the Toronto General Hospital's radiology lab.

8. The cost of leasing a toll-free telephone number at Staples Canada. The monthly charge

for the toll-free number is independent of the number of calls taken.

9. The depreciation on the playground equipment at a McDonald's outlet.

10. The cost of mozzarella cheese used at a Pizza Hut outlet.