Cost Classification (Assignment #1) List all the key products or items that you
ID: 2342178 • Letter: C
Question
Cost Classification (Assignment #1) List all the key products or items that you will need to start the business. A preliminary list is included in Table 1. You may add to this list, if necessary. One of you will serve as the accountant to perform bookkeeping services. The remaining members will hold various key positions within the actual bakery as defined by the group. Your cost drivers are provided in Table 1. Required: Classify the various costs. In order to manage these costs, you need to identify them using the information below. Use Table 2 for your answers. a) Behavior (fixed or variable) b) Traceability (direct or indirect) c) Financial reporting (product or period) d) If product cost, identify which items are direct materials, direct labor or manufacturing overhead.
Explanation / Answer
Cost Classification chart Behaviorr Traceability Financial reporting Classification Fixed variable Direct Indirect Product Period DM DL MOH Remarks Oven Yes Yes Yes Yes Fixed and overheads - in the form of depreciation over the life of oven cash register Yes Yes Yes Yes Baking PANs no cost incurred Business license no cost incurred health inspections Yes Yes Yes Yes rent Yes Yes Yes Yes utiltiies Yes Yes Yes Yes Mobile phone Yes Yes Yes Yes Flour Yes Yes Yes Yes Sugar Yes Yes Yes Yes baking soda Yes Yes Yes Yes butter Yes Yes Yes Yes raisons Yes Yes Yes Yes eggs Yes Yes Yes Yes rum Yes Yes Yes Yes Others Yes Yes Yes Yes Accountant Yes Yes Yes Yes