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    Classification of Manufacturing Costs

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    Classify each of the following as direct or indirect with respect to traceability to product and as variable
    or fixed with respect to whether the costs fluctuate in total as volume of production changes over
    wide ranges. Explain your classifications.
    1. The wages of machine operators who work on only one product.
    2. The cost of components that are assembled into a final product.
    3. The cost of supplies consumed when maintenance is performed on machines.
    4. The cost of training mechanics who service processing machinery.

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    Solution Preview

    1. Direct and Variable - we would be able to trace the cost to the product and it would vary with production
    2. Direct and Variable - The components ...

    Solution Summary

    The solution explains the classification of manufacturing costs as direct or indirect and fixed or variable.