Question

1. Variable, Fixed, and Mixed Costs

   Classify the following costs of activity inputs as variable, fixed, or mixed. Identify the activity and the associated activity driver that allow you to define the cost behavior. For example, assume that the resource input is “cloth in a shirt." The activity would be "sewing shirts," the cost behavior "variable," and the activity driver "units produced." Prepare your answers in the following format:

   	Activity	Cost Behavior	Activity Driver
   a. Flu vaccine	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   b. Salaries, equipment, and materials used for moving materials in a factory	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   c. Forms used to file insurance claims	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   d. Salaries, forms, and postage associated with purchasing	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   e. Printing and postage for advertising circulars	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   f. Equipment, labor, and parts used to repair and maintain production equipment	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   g. Power to operate sewing machines in a clothing factory	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   h. Wooden cabinets enclosing audio speakers	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   i. Advertising	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   j. Sales commissions	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   k. Fuel for a delivery van	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Mileage Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Mileage Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   l. Depreciation on a warehouse	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   m. Depreciation on a forklift used to move partially completed goods	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   n. X-ray film used in the radiology department of a hospital	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold
   o. Rental car provided for a client	Assembling Delivering orders Filing claims Maintaining equipment Moving materials Purchasing goods Selling goods Selling products Sewing Storing goods Transporting clients Vaccinating patients X-raying patients	Variable Fixed Mixed	Machine hours Maintenance hours Miles driven Number of circulars Number of claims Number of flu shots Number of moves Number of orders Number of X-rays Square feet Units produced Units sold

Answer 1

Solution:-

Cost behaviour pattern is as shown below:

a. Flu vaccine	Clients vaccinating	Variable	Number of flu shots
b. Salaries, equipment, and materials used for moving materials in a factory	Maintaining equipment	Mixed	Maintenance hours
c. Forms used to file insurance claims	Filing Claims	Variable	Number of claims
d. Salaries, forms, and postage associated with purchasing	Purchasing Goods	Mixed	Units produced
e. Printing and postage for advertising circulars	Advertising	variable	Number of advertisements
f. Equipment, labor, and parts used to repair and maintain production equipment	Maintenance service	Mixed	Number of production equipments
g. Power to operate sewing machines in a clothing factory	Sewing	Variable	Machine hours
h. Wooden cabinets enclosing audio speakers	Endosing audio speakers	Variable	Number of audio speakers
i. Advertising	Selling goods	Variable	Number of goods sold
j. Sales commissions	Selling products	Variable	Units sold
k. Fuel for a delivery van	Delivering orders	Variable	Number of orders
l. Depreciation on a warehouse	Storing Goods	Fixed	Square feet
m. Depreciation on a forklift used to move partially completed goods	Moving materials	Fixed	Number of moves
n. X-ray film used in the radiology department of a hospital	X-raying patients	Variable	Number of X rays
o. Rental car provided for a client	Transporting	Mixed	Miles driven