Answer:
Costs in various organizations
Indication of whether it would be variable or fixed with respect to the number of units produced and sold; and then whether it would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost, indicate whether it is a direct cost or an indirect cost with respect to units of product:
1. Property taxes, factory.
Fixed / Manufacturing cost / Indirect cost with respect to units of product.
2. Boxes used for packaging detergent produced by the company.
Variable / Manufacturing cost / Indirect cost with respect to units of product.
3. Salespersons' commissions.
Variable / Selling cost /
4. Supervisor's salary, factory.
Fixed / Manufacturing / Indirect cost with respect to units of product.
5. Depreciation, executive autos.
Fixed / Administrative cost
6. Wages of workers assembling computers.
Variable / Manufacturing / Direct cost
7. Insurance, finished goods warehouses.
Fixed / Selling cost
8. Lubricants for production equipment.
Variable / Manufacturing / Indirect cost
9. Advertising costs.
Fixed / Selling cost
10. Microchips used in producing calculators.
Variable / Manufacturing / Direct cost
11. Shipping costs on merchandise sold.
Variable / Selling cost
12. Magazine subscriptions, factory lunchroom.
Fixed / Manufacturing / Indirect cost
13. Thread in a garment factory.
Variable / Manufacturing / Direct cost
14. Billing costs.
Fixed / Administrative cost
15. Executive life insurance.
Fixed / Administrative cost
16. Ink used in textbook production.
Variable / Manufacturing / Direct cost
17. Fringe benefits, assembly-line workers.
Fixed / Manufacturing / Indirect cost
18. Yarn used in sweater production.
Variable / Manufacturing / Direct cost
19. Wages of receptionist, executive offices.
Fixed / Administrative cost
Explanation:
In various organizations, costs are classified differently. Some classify costs according to their functions, nature, and behavior. In manufacturing organizations, the attribution of costs to the products is very important in determining the costs and prices of such products. This implies that some costs do not directly reflect on the product's per unit cost. Such costs are not considered in determining the cost of a product. An example is the salary expense of an administrative officer. The work of this officer only impacts the smooth running of the organization, and not the production of goods and services.
