Classify each cost as being either variable or fixed with respect to the number
ID: 341606 • Letter: C
Question
Classify each cost as being either variable or fixed with respect to the number of units produced and sold. Also classify each cost as either a seling and administrative cost or a product cost. Period (Selling and Cost Item Cost Behavior Administrative) Cost/Product Cost . Hamburger buns in a Wendy's outlet. 2. Advertising by a dental office. 3. Apples processed and canned by Del Monte. 4. Shipping canned apples from a Del Monte plant to customers. 5. insurance on a Bausch & Lomb factory producing contact lenses. 6. Insurance on IBM's corporate headquarters. 7 Salary of a supervisor overseeing production of printers at Hewlett- Packard 8· Commissions paid to automobile salespersons. 9. Depreciation of factory lunchroom facilities at a General Electric plant. 10. Steering wheels installed in BMWs.Explanation / Answer
Cost Item Cost Behavior Cost 1. Hamburger buns in a Wendy's outlet. Variable Product cost 2. Advertising by a dental office. Fixed Selling and administrative cost 3. Apples processed and canned by Del Monte. Variable Product cost 4. Shipping canned apples from a Del Monte plant to customers. Variable Selling and administrative cost 5. Insurance on a Bausch & Lomb factory producing contact lenses. Fixed Product cost 6. Insurance on IBM's corporate headquarters. Fixed Selling and administrative cost 7. Salary of a supervisor overseeing productionof printers at Hewlett-Packard. Fixed Product cost 8. Commissions paid to Encyclopedia Britannica salespersons. Variable Selling and administrative cost 9. Depreciation of factory lunchroom facilitiesat a General Electric plant. Fixed Product cost 10. Steering wheels installed in BMWs. Variable Product cost