Question

20. LO.2 & LO.3 (Cost behavior and classification)Indicatewhether each of the following items is a variable (V),fixed (F), ormixed (M) cost and whether it is product/service (PT)or period (PD)cost. If some items have alternative answers,indicate thealternatives and the reasons for them.

a. Wages of factory maintenance workers.

b. Wages of forklift operators who move finished goods fromacentral warehouse to the loading dock

c. Insurance premiums paid on the headquarters of amanufacturingcompany

d. Cost of labels attached to shirt made by a company

e. Property taxes on a manufacturing plant

f. Paper towels used in factory restrooms

g. Salaries of office assistants in a law firm

h. Freight costs of acquiring raw material from suppliers

i. Computer paper used in an accounting firm

j. Cost of wax to make candles

k. Freight-in on a truckload of furniture purchasedforresale

21. LO.2 & LO.3 ( Cost behavior and classification)Classifyeach of the following cost insured in manufacturingbicycles asvariable (V), fixed (F), or mixed (M) cost (using numberof unitsproduced as the activity measure). Also indicate whetherthe costis direct material (DM), direct labor (DL), or overhead(OH).

a. Factory supervision

b. Aluminum tubing

c. Rims

d. Emblem

e. Gearbox

f. Straight-line depreciation on paint machine

g. Fenders

h. Inventory clerk’s salary

i. Inspector’s salary

j. Handlebars

k. Metal worker’s wages

l. Roller chain

m. Spokes (assuming cost is considered significant)

n. Paint (assuming cost is considered significant)