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Cost Classification for Raw Materials

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For each of the following costs, identify whether the item is a variable or fixed cost, direct or indirect cost, and controllable or uncontrollable cost. (For example: Plant Utilities would be a variable, indirect, and controllable cost.) Not all items will fit into each category. Label items that do not fit a categories as not applicable.

Raw materials.
Staples used to secure packed boxes of the product.
Plant janitor's wages.
Order processing clerk's wages.
Advertising expenses.
Production worker's wages.
Production supervisor's salaries.
Sales force commissions.
Maintenance supplies used.
President's salary.
Electricity cost for the office building.
Real estate taxes for the plant.
Production run setup costs.
Depreciation of plant equipment.
Outbound shipping costs.

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Solution Summary

The solution examines cost classification for raw materials. For each cost, the expert identifies whether the item is a variable or fixed cost, direct or indirect cost and controllable or uncontrollable cost.

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