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Listed below are costs found in various organizations. For each cost item, indicate whether it would be variable or fixed with respect to the
Listed below are costs found in various organizations. 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 product cost. If it is a product cost, indicate whether it would typically be treated as a direct or an indirect cost with respect to units of product. Three sample answers are provided for illustration: Ex. Direct labour Executive salaries Factory rent 1. Depreciation, executive jet. Cost Item 2. Costs of shipping finished goods to customers. 3. Wood used in manufacturing furniture. 4. Sales manager's salary. 5. Electricity used in manufacturing furniture. 6. Salary of the secretary to the company president. 7. Aerosol attachment placed on a spray can produced by the company. 8. Packing supplies for shipping products overseas. 9. Sand used in manufacturing concrete. 10. Supervisor's salary, factory. 11. Executive life insurance. 12 Sales commissions. 13. Advertising costs. 14. Property taxes on warehouses used to store finished goods. 15. Lubricants for production equipment. Variable or Selling Fixed Cost Administrative Cost Product Cost Direct Indirect Variable No No Yes No Fixed No Yes No No Fixed No No No Yes
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