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2 Problem 1-23 Cost Classification (L01-1, LO1-3, L01-4) 15 points Listed below are costs found in various organizations. Required: For each cost item, indicate whether

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2 Problem 1-23 Cost Classification (L01-1, LO1-3, L01-4) 15 points Listed below are costs found in various organizations. Required: 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. BO Manufacturing (Product) Cost Direct Indirect Cost Item Selling Cost Administrative Cost Yes Variable or Fixed Variable Fixed Fixed Yes Yes References Ex Direct labor Executive salaries Factory rent 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 B 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 2 Cost Item Selling Cost Administrative Cost Direct Indirect Variable or Fixed Variable Yes Yes 15 points Fixed Fixed Yes eBook Ex. Direct labor Executive salaries Factory rent 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 handing workers 17 Yam used in sweater production 18. Wages of receptions, executive offices References

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