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Required Classify each of the following cost items as a. Direct or indirect (D or I) costs with respect to the type of car
Required Classify each of the following cost items as a. Direct or indirect (D or I) costs with respect to the type of car assembled (Corolla or Geo Prism). b. Variable or fixed (V or F) costs with respect to how the total costs of the plant change as the number of cars assembled changes. (If in doubt, select the cost type based on whether the total costs will change substantially if a large number of cars are assembled.) You will have two answers (D or I, and V or F) for each of the following items: Salary of public relations manager for NUMMI plant. A. Cost of tires used on Geo Prisms. B. C. Annual awards dinner for Corolla suppliers. D. E. F. G. H. basis). Salary of engineer who monitors design changes on Geo Prism. Freight costs of Corolla engines shipped from Toyota City, Japan, to Fremont, California. Electricity costs for NUMMI plant (single bill covers entire plant). Wages paid to temporary assembly-line workers hired in periods of high production (paid on an hourly Annual fire-insurance policy cost for NUMMI plant. EXERCISE 6. VARIABLE COSTS, FIXED COSTS, TOTAL COSTS. Ana Compo is getting ready to open a small restaurant. She is on a tight budget and must choose between the following long-distance phone plans: Plan A: Pay 10 cents per minute of long-distance calling. Plan B: Pay a fixed monthly fee of $16 for up to 300 long-distance minutes, and 5 cents per minute thereafter (if she uses fewer than 300 minutes in any month, she still pays $16 for the month). Plan C: Pay a fixed monthly fee of $20 for up to 480 long-distance minutes and 4 cents per minute thereafter (if she uses fewer than 480 minutes, she still pays $20 for the month). Required 1. Which plan should Compo choose if she expects to make 100 minutes of long- distance calls? 300 minutes? 500 minutes?
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