PROBLEM 1-23 Cost Classification L01-1, LO1=a, L01-4 Listed below are costs found in various organizations. 1. Property taxes, factory 2. Boxes used for packaging detergent produced by the company. 3. Salespersons' commissions. 4. Supervisor's salary, factory. 5. Depreciation, executive autos. 6. Wages of workers assembling computers. 7. Insurance, finished goods warehouses. 8. Lubricants for production equipment. 9. Advertising costs. 10. Microchips used in producing calculators 11. Shipping costs on merchandise sold. 12. Magazine subscriptions, factory lunchroom 13. Thread in a garment factory. 14. Executive life insurance. 15. Ink used in textbook production. 16. Fringe benefits, materials handling workers. 17. Yarn used in sweater production. 18. Wages of receptionist, executive offices. 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 is a direct cost or an indirect cost with respect to units of product. Three sample answers are provided for illustration. Variable Selling Administrative or Fixed Cost Manufacturing (Product) Cost Direct Indirect Cost Cost Item Direct labor Factory rent