Johnson & Johnson manufactures pharmaceutical products using mixed costing. In March 2033, the company incurs the following costs related to its production and distribution:

• Direct Materials: $200 million
• Direct Labor: $120 million
• Factory Overhead: $80 million
• Selling Expenses: $50 million
• Distribution Expenses: $30 million
• Indirect Labor: $40 million

Required:

• Classify each cost as direct, indirect, fixed, variable, or semi-variable.
• Allocate factory overhead and indirect labor costs to production and distribution activities.
• Analyze the cost structure and profitability of Johnson & Johnson using mixed costing.
• Discuss the impact of cost allocation methods on financial reporting.
• Prepare a mixed costing statement for Johnson & Johnson.