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AE 10.1 Gatton Foods Ltd manufactures a range of canned meat. Below is a selection of the costs accumulated by its accounting department. Assuming the

AE 10.1 Gatton Foods Ltd manufactures a range of canned meat. Below is a selection of the costs accumulated by its accounting department. Assuming the cost object is the product, classify each of these costs as direct or indirect. Also classify each cost as variable or fixed in respect of its expected reaction to changes in volume of production. CHOOSE THE RIGHT ANSWER: (Direct OR Indirect) | (Variable OR Fixed)

  • Raw meat acquired for processing:Direct | Variable
  • Purchase of gas for cooking ovens:Direct | Variable
  • Cost of tin cans :Direct | Variable
  • Repair costs for canning machines :Indirect | Variable
  • Wages for plant security:Indirect | Fixed
  • Depreciation of cooking ovens :Indirect | Variable
  • Freight cost of raw materials inwards :Direct | Variable
  • Cost of building insurance :Indirect | Fixed
  • Cost of can labels:Direct | Variable
  • Cost of cleaning materials for factory:Indirect | Fixed
  • General manager's salary :Indirect | Fixed
  • Factory supervisor's salary :Indirect | Fixed
  • Annual licence fee for health regulations :Indirect | Fixed

Please note, I made a mistake and not sure where the mistake is as I scored 4.81/5 marks.

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