Cost Classification (Assignment #1) Her first action plan was to list all the ke
ID: 2410674 • Letter: C
Question
Cost Classification (Assignment #1) Her first action plan was to list all the key products or items that she would need to start the business. Keisha's list included a conventional oven, a cash register, baking pans, busines:s licenses, health inspections, flour, sugar, baking soda, raisins, butter, eggs, and rum. She also planned on hiring her accounting professor on a part time basis to perform bookkeeping services and her nieces Brianna and Alexis, to help her in the bakery. Aunt Sue Ellen would supervise the girls so that Keisha could focus on developing her business. K&J;'s cost drivers are provided in Table 1. Required: Keisha needs your help in classifying the various costs. In order to manage these costs,she wants them identified using the information below. She asked that you 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
Costs
Behavior
Tractability
Financial Reporting
DM,DL,MOH
Oven
Fixed
Indirect
Period
MOH
Cash Register
Baking Pans
Fixed
Indirect
Product
MOH
Business License
Fixed
Indirect
Period
Health Inspections
Variable
Indirect
Period
Rent
Fixed
Indirect
Period
Utilities
Fixed
Indirect
Period
Mobile Phone
Fixed
Indirect
Period
Flour
Variable
Direct
Product
DM
Baking Soda
Variable
Direct
Product
DM
Butter
Variable
Direct
Product
DM
Raisins
Variable
Direct
Product
DM
Eggs
Variable
Direct
Product
DM
Rum
Variable
Direct
Product
DM
Other
Variable
Direct
Product
DM
Accountant
Fixed
Indirect
Period
Brianna
Variable
Direct
Product
DL
Alexis
Variable
Direct
Product
DL
Keisha
Fixed
Indirect
Period
DL
Aunt
Fixed
Indirect
Period
Cost Classification Chart
Costs
Behavior
Tractability
Financial Reporting
DM,DL,MOH
Oven
Fixed
Indirect
Period
MOH
Cash Register
Baking Pans
Fixed
Indirect
Product
MOH
Business License
Fixed
Indirect
Period
Health Inspections
Variable
Indirect
Period
Rent
Fixed
Indirect
Period
Utilities
Fixed
Indirect
Period
Mobile Phone
Fixed
Indirect
Period
Flour
Variable
Direct
Product
DM
Baking Soda
Variable
Direct
Product
DM
Butter
Variable
Direct
Product
DM
Raisins
Variable
Direct
Product
DM
Eggs
Variable
Direct
Product
DM
Rum
Variable
Direct
Product
DM
Other
Variable
Direct
Product
DM
Accountant
Fixed
Indirect
Period
Brianna
Variable
Direct
Product
DL
Alexis
Variable
Direct
Product
DL
Keisha
Fixed
Indirect
Period
DL
Aunt
Fixed
Indirect
Period