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Budgeting: Classify costs as variable, fixed, mixed; Define

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Accounting Questions on Budgeting

A) In today's work force there are those who earn "Salaries", "Wages" and "Base plus Commissions". Identify each distinct applicable cost.

B) Exercise 13.3 & 13.4 - Cost Classifications: Mark with an X for each type

COST TYPES VARIABLE COST FIXED COST MIXED COST
Wages of assembly-line workers
Depreciation of plant equipment
Glue and thread
Outbound shipping costs
Raw materials handling costs
Salary of public relations manager
Production run setup costs
Plant utilities
Electricity cost of retail stores
Research and development expense

Raw materials
Staples used to secure packed boxes of product
Plant janitors' wages
Order processing clerk's wages
Advertising expenses
Production workers' wages
Production supervisors' salaries
Salesforce commissions
Maintenance supplies used
President's salary
Electricity cost for office building
Real estate taxes for factory
Real estate taxes for office building

C) Please give a clear definition and examples for each of the following:

1. Financial Accounting

2. Committed Costs (CC)

3. Mixed Costs (MC)

4. Variable Costs (VC)

5. Participative Budgeting

6. A Rolling Budget

7. Top-down Budgeting

8. Zero-Based Budgeting

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Your tutorial is 662 words and gives you a paragraph or so for each definition that explains the term and gives you a practical example for each. The classification of direct/indirect is not part of this posting.

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A) In today's work force there are those who earn "Salaries", "Wages" and "Base plus Commissions". Identify each distinct applicable cost.
Salaries are fixed because they are the same all year regardless of activity.

Wages are variable because with each hour worked, they rise. As activity changes, up or down, so do wages.
Base plus commission is a mixed cost with a fixed portion, the base, and a variable portion, the commission.

B) Exercise 13.3 & 13.4 - Cost Classifications: Mark with an X for each type

See attached for better formatting

COST TYPES VARIABLE COST FIXED COST MIXED COST
Wages of assembly-line workers x
Depreciation of plant equipment (assume SL) x
Glue and thread x
Outbound shipping costs x
Raw materials handling costs x
Salary of public relations manager x
Production run setup costs x
Plant utilities x
Electricity cost of retail stores x
Research and development expense x

Raw materials x
Staples used to secure packed boxes of product x
Plant ...

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  • MSc, University of Virginia
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