1. Consider the following items: A. Tomatoes used in the manufacture of ketchup B. Administrative salaries of executives employed by a regional airline C. Wages of assembly-line workers at an automobile manufacturing plant D. Marketing expenditures of the major league baseball club E. Commissions paid to the salespeople working for a soft drink company F. Straight-line depreciation on manufacturing equipment owned by a computer manufacturer G. Shipping charges incurred by office supplies retailer on out-going orders H. Speakers used in a consumer electronics companys home-theater systems I. Insurance costs related to a cosmetics manufacturing plant

Required: Complete the table that follows and classify each of the costs listed as (1) a product or period cost and (2) a variable or fixed cost by placing an "X" in the appropriate column. (18 points)

	Product or Period Cost		Variable or Fixed Cost
Item	Product	Period	Variable	Fixed
A
B
C
D
E
F
G
H
I

2. Consider the following cost items: 1. Sales commissions earned by a company's sales force. 2. Raw materials purchased during the period. 3. Current year's depreciation on a firm's manufacturing facilities. 4. Year-end completed production of a carpet manufacturer. 5. The cost of products sold to customers of an apparel store. 6. Wages earned by machine operators in a manufacturing plant. 7. Income taxes incurred by an airline. 8. Marketing costs of an electronics manufacturer. 9. Indirect labor costs incurred by a manufacturer of office equipment. Required: Evaluate the costs just cited and determine whether the associated dollar amounts would appear on the firm's balance sheet, income statement, or schedule of cost of goods manufactured. (9 points)

3. Opal Inc. used $213,000 of direct materials and incurred $111,000 of direct labor costs during 2015. Indirect labor amounted to $8,100 while indirect materials used totaled $4,800. Other operating costs pertaining to the factory which are all considered manufacturing overhead included factory utilities of $9,300; factory maintenance of $13,500; factory repairs of $5,400; depreciation on factory equipment of $23,700; and, property taxes on the factory of $7,800. There was no beginning or ending finished goods inventory. The Work-in-Process Inventory account reflected a balance of $16,500 at the beginning of the period and $22,500 at the end of the period.

Required: Prepare a schedule of cost of goods manufactured for Opal Inc. (23 points)

4. The phone bill for a company consists of both fixed and variable costs. Given the data below for four months apply the high-low method to calculate the total fixed costs and variable cost per unit. (10 points)

	Minutes	Total Bill
January	460	$3,000
February	200	$2,675
March	160	$2,625
April	300	$2,800