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tq (c) Three Cats Bakery has 80,000 Sq. Ft building, containing manufacturing, distribution and corporate offices. The company producing baked biscuits, brownies, cakes, and items
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(c) Three Cats Bakery has 80,000 Sq. Ft building, containing manufacturing, distribution and corporate offices. The company producing baked biscuits, brownies, cakes, and items that can pack and ship well. There is one main assembly-line with stations for mixing ingredients, mechanized cutting of shapes, extruding doughnut-shaped biscuits, placing biscuits on baking sheets, baking in ovens, hand packing into trays or containers, and boxing. Employees are trained to perform multiple assembly-line functions and can work on every type of product produced at the plant. The retail outlets also sell nonfood products such as bowls, leashes, books, mugs and T-shirts. Based on the above situation, state the following items as Direct or Indirect cost and Fixed or Variable cost with respect to the Production Department. EIB30503_Management Accounting Page 2 of 6 JANUARY 2021 CONFIDENTIAL Cost Item Direct or Fixed or Indirect Variable cost Salary of the production department manager who oversees manufacturing Salaries of founders Mr. Abu Cardboard trays used to package sets of specialty biscuits Salary of the web graphics designer who prepares the online illustrations and layout Annual maintenance service agreement for the conveyor belt Wages paid to assembly line workers who mix ingredients in batches Utilities (water, electricity, waste) for the entire warehouse Cost of flour, eggs, and honey-yogurt icing for biscuits and browniesStep by Step Solution
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