In: Accounting
- Factory supervisors’ salaries -> product cost or period cost and why?
- Speakers used in Sony home-theater systems -> variable or fixed cost and why?
- Insurance costs related to a Mary Kay Cosmetics' manufacturing plant -> variable or fixed cost and why?
Factory supervisor's salaries - Product cost
Because product cost refers to the cost incurred to create the product. It includes direct materials, direct labor and factory overhead. Factory supervisor salaries is a part of factory overhead.
Speakers used in Sony home theater systems - Variable cost
Variable cost is a cost that varies with the level of output. Speakers cost will depend on the no. of Sony home theater sold. Hence it is a variable cost.
Insurance costs related to a Mary Kay cosmetics manufacturing plant - Fixed cost
Fixed cost does not vary with change in number of goods produced or sold. Insurance cost is a fixed cost as it would remain constant irrespective of goods produced or sold.