Classify Costs Seymour Clothing Co. manufactures a variety of clothing types for
ID: 2466407 • Letter: C
Question
Classify Costs Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue eans: Required: Identify each cost listed below as variable costs, fixed costs, or mixed cost a. Shipping boxes used to ship orders b. Consulting fee of $200,000 paid to industry specialist for marketing advice c. Straight-line depreciation on sewing machines d. Salesperson's salary, $10,000 plus 2% of the total sales e. Fabric f. Dye 9. Thread h. Salary of designers i. Brass buttons j. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour $50,000 plus $87 per hourExplanation / Answer
A) Shipping boxes used to ship orders Variable B) Consulting fee of $200,000 paid to industry specialist for marketing advice Fixed C) Straight-line depreciation on sewing machines Fixed D) Salesperson's salary, $10,000 plus 2% of the total sales Mixed E) Fabric Variable F) Dye Variable G) Thread Variable H) Salary of designers Fixed I) Brass buttons Variable J) Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour Mixed K) Insurance premiums on property, plant, and equipment, $70,000 per year plus $5 per $30,000 of insured value over $8,000,000 Mixed L) Rental costs of warehouse, $5,000 per month plus $4 per square foot of storage used Mixed M) Supplies Variable N) Leather for patches identifying the brand on individual pieces of apparel Variable O) Rent on Plant equipment, $50,000 per year Fixed P) Salary of production vice president Fixed Q) Janitorial services, $2,200 per month Fixed R) wages of machine operators Variable S) Electricity costs of $0.10 per kilowatt-hour Variable T) Property taxes on property, plant, and equipment: Fixed