Question
Required: For each cost item in the table below, first indicate whether it would be variable (V ) or fixed ( F) with respect to
Required:For each cost item in the table below, first indicate whether it wouldbevariable(V) or fixed (F) with respect to the number of units produced and sold. Then, if appropriate, write down whether the item is a selling or administrative cost(S or A). If the item is a manufacturing cost, leave the selling or administrative cost column blank. For an item that is a manufacturing cost write down whether it would typically be treated as a direct cost or an indirect cost(D or I) with respect to the activity level, in the third column.Points will be deducted for filling in more than one box per category (e.g. you should not fill both variable and fixed cost per item).
Cost Item | Variable (V) or Fixed (F) Cost | Selling (S) or Administrative (A) Cost | Manufacturing Cost, Direct (D) or Indirect (I) |
1. | Plane ticket for a sales person going to her national sales convention. | |||
2. | Supervisor's salary at a General Motors plant.
| |||
3. | Soap and towels used in company headquarters washrooms. | |||
4. | Lease of computers in the CEO's office of a large firm. | |||
5. | Fringe benefits paid to factory workers who make washing machines. | |||
6. | Life insurance for executives in company's sales division. | |||
7. | Salary of a manager in the advertising department. | |||
8. | Commissions paid to salespersons selling phone services. | |||
9. | Depreciation of a children's day care facility at the corporate office of a large company. | |||
10. | Inspirational posters encouraging people to work hard that were purchased to decorate factory walls. |
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