Classification of Manufacturing Costs

Costs are either direct or indirect depending on whether they can be traced to a cost object, and are

either variable or " fixed depending on whether they vary with changes in volume. Classify each of

the following as direct (D) or indirect (I) with respect to a product as the cost object and as a variable (V)

or " fixed (F). For each of the 10 items, you will have two answers, D or I and V or F.

1. Factory rent

2. Salary of a factory storeroom clerk

3. Cement for a road builder

4. Supervisor training program

5. Abrasives (e.g., sandpaper)

6. Cutting bits in a machinery department

7. Food for a factory cafeteria

8. Workers' compensation insurance in a factory

9. Steel scrap for a blast furnace

10. Paper towels for a factory washroom