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Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and
Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue jeans:
Required:
Identify each cost listed below as variable costs, fixed costs, or mixed cost.
Line Item Description | Cost Type |
---|---|
a. Shipping boxes used to ship orders | FixedMixedVariable |
b. Consulting fee of $200,000 paid to industry specialist for marketing advice | FixedMixedVariable |
c. Straight-line depreciation on sewing machines | FixedMixedVariable |
d. Salesperson's salary, $10,000 plus 2% of the total sales | FixedMixedVariable |
e. Fabric | FixedMixedVariable |
f. Dye | FixedMixedVariable |
g. Thread | FixedMixedVariable |
h. Salary of designers | FixedMixedVariable |
i. Brass buttons | FixedMixedVariable |
j. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour | FixedMixedVariable |
k. Insurance premiums on property, plant, and equipment, $70,000 per year plus $5 per $30,000 of insured value over $8,000,000 | FixedMixedVariable |
k. Rental costs of warehouse, $5,000 per month plus $4 per square foot of storage used | FixedMixedVariable |
m. Supplies | FixedMixedVariable |
n. Leather for patches identifying the brand on individual pieces of apparel | FixedMixedVariable |
o. Rent on plant equipment, $50,000 per year | FixedMixedVariable |
p. Salary of production vice president | FixedMixedVariable |
q. Janitorial services, $2,200 per month | FixedMixedVariable |
r. Wages of machine operators | FixedMixedVariable |
s. Electricity costs of $0.10 per kilowatt-hour | FixedMixedVariable |
t. Property taxes on property, plant, and equipment | FixedMixedVariable |
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