Question

In: Finance

Review Problems for Cost Classification 1. The cost of leather used in the production of women’s...

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?

Solutions

Expert Solution

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

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