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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 number
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 Cast item Variable or Fixed Product Cost Selling Cost Administrative Cost Ex Direct labour Direct Indirect Variable No No Executive salaries Yes No Fixed No Yes No No Foced No No No Yes roved Factory rent 1. Depreciation, executive jet 2. Costs of shipping finished goods to customers. 2. 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. 2. Costs of billing customers. 0. Packing supplies for shipping products overseas. 10 Sand used in manufacturing concrete 11. Supervisor's salary, factory 12. Executive life insurance 13 Sales commissions 14 Employee benefits, assembly-line workers. 15. Advertising costs 18 Property taxes on warehouses used to store finished goods. 17 Lubricants for production equipment
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