In: Finance
Review Problems for Cost Classification
1.
The cost of leather used in the production of women’s
shoes.
2.
Maintenance costs for painting equipment in a car
factory.
3.
The VP of HR’s annual salary.
4.
Rent on the manufacturing facility.
5.
Depreciation on a tradeshow booth.
6.
Salary of a labourer hired to sew soles to shoes.
7.
Telephone charges of the CEO’s assistant.
8.
Cost of paper required to print coupons to be mailed to
customers.
9.
Rent on the head office building.
10.
Shipping charges for goods shipped to customers.
11.
Cost of an abstract painting for the head office
cafeteria.
12.
The cost of a 30-second Superbowl Ad
Categorize by:
1 – type of cost?
2 – Product or Period Cost/
3 – What is the underlying cost behavior – Fixed or
Variable?
Review Problems for Cost Classification | |||||
Type of Cost | Product/Period | Fixed/Variable | |||
1 | The cost of leather used in the production of women’s | Direct Materals | Product | Variable | |
shoes. | |||||
2 | Maintenance costs for painting equipment in a car Factory | Manufacturing Overhead | Product | Fixed | |
3 | The VP of HR’s annual salary. | Administrative Overhead | Period | Fixed | |
4 | Rent on the manufacturing facility. | Manufacturing Overhead | Product | Fixed | |
5 | Depreciation on a tradeshow booth. | Sales& Marketing Overhead | Period | Fixed | |
6 | Salary of a labourer hired to sew soles to shoes. | Administrative Overhead | Period | Variable | |
7 | Telephone charges of the CEO’s assistant. | Administrative Overhead | Period | Variable | |
8 | Cost of paper required to print coupons to be mailed to customers | Sales& Marketing Overhead | Period | Variable | |
9 | Rent on the head office building. | Administrative Overhead | Period | Fixed | |
10 | Shipping charges for goods shipped to customers. | Sales& Marketing Overhead | Period | Variable | |
11 | Cost of an abstract painting for the head office | Administrative Overhead | Period | Variable | |
cafeteria. | |||||
12 | The cost of a 30-second Superbowl Ad | Sales& Marketing Overhead | Period | Variable | |