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Chapter 2 Solutions, 1st Day

Chapter 2 Solutions, 1st Day - Chapter 2 Solutions 1st Day...

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Chapter 2 Solutions, 1 st Day Problem 2-13 (30 minutes) Note to the Instructor: There may be some exceptions to the answers below. The purpose of this problem is to get the student to start thinking about cost behavior and cost purposes; try to avoid lengthy discussions about how a particular cost is classified. Variable or Selling Administrativ e Manufacturin g (Product) Cost Cost Item Fixed Cost Cost Direc t Indirect 1. Property taxes, factory .......................... F X 2. Boxes used for packaging detergent produced by the company .................. V X 3. Salespersons’ commissions ................... V X 4. Supervisor’s salary, factory ................... F X 5. Depreciation, executive autos ............... F X 6. Wages of workers assembling computers .......................................... V X 7. Insurance, finished goods warehouses.. F X 8. Lubricants for production equipment .... V X 9. Advertising costs ................................... F X 10. Microchips used in producing calculators .......................................... V X 11. Shipping costs on merchandise sold ..... V X 12. Magazine subscriptions, factory F X
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lunchroom .......................................... 13. Thread in a garment factory ................. V X 14. Billing costs ........................................... V X* 15. Executive life insurance ........................ F X
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Problem 2-13 (continued) Variable or Selling Administrativ e Manufacturin g (Product) Cost Cost Item Fixed Cost Cost Direc t Indirect 16. Ink used in textbook production ............ V X 17. Fringe benefits, assembly-line workers. V X** 18. Yarn used in sweater production ........... V X 19. Wages of receptionist, executive offices ................................................. F X * Could be administrative cost.
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