Cost classification
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Cost Classifications
The following are costs associated with manufacturing firms, merchandising firms, or service firms:
a. Miscellaneous materials used in production
b. Salesperson's commission in a real estate firm
c. Administrators' salaries for a furniture wholesaler
d. Administrators' salaries for a furniture manufacturer
e. Freight costs associated with acquiring inventories for a grocery store
f. Office manager's salary in a doctor's office
g. Utilities for the corporate offices of a toy manufacturer
h. Line supervisor's salary for a clothing manufacturing firm
i. Training seminar for sales staff of a service firm
j. Fuel used in a trucking firm
k. Paper used at a printing business
l. Oil for machinery at a plastics manufacturing firm
m. Food used at a restaurant
n. Windshields used for a car manufacturer
Classify the costs as (1) product or period; (2) variable or fixed; and (3) for those that are product
costs, as direct materials, direct labor, or manufacturing overhead. Write "not applicable
(N/A)" if a category doesn't apply.
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Solution Summary
This discusses the concept of costs such as period cost, fixed cost, variable cost, direct cost and indirect cost with the help of examples
Solution Preview
The following are costs associated with manufacturing firms, merchandising firms, or service firms:
a. Miscellaneous materials used in production
Product and variable
b. Salesperson's commission in a real estate firm
Fixed and NA as it's a Selling overhead
c. Administrators' salaries for a furniture wholesaler
Period and fixed
d. Administrators' salaries for a furniture ...
Purchase this Solution
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