1. You are in the process of assigning costs to a specified cost object. You have determined which costs you will assign and are now in the process of deciding which costs to assign directly and which to assign indirectly.

a) Explain specifically how you would decide which costs to assign directly versus which to assign indirectly. b) Define cost, cost object, direct cost and indirect cost. c) How would advanced information gathering technology affect your classification?

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2. Strauss Table Company manufactures tables for schools. The 20x4 operating budget is based on sales of 20,000 units at $100 per table. Operating income is anticipated to be $120,000. Budgeted variable costs are $64 per unit, while fixed costs total $600,000. Actual income for 20x4 was a suprising $354,000 on actual sales of 21,000 units at $104 each. Actual variable costs were $60 per unit and fixed costs totaled $570,000. Required: Prepare a 5 column variance analysis report with actual results, flexible-budget, static budget, flexible budget variances and sales-volume variances.