Essential College Supplies (ECS) is a store on the campus on a large Midwestern university. The store has both an apparel section (t-shirts with the school logo) and a convenience section. ECS reports revenues for the apparel section separately from the convenience section. Requirement Classify each cost item (A-H) as follows: a. Direct or indirect (D or I) costs of the total number of t-shirts sold. b. Variable or fixed (V or F) costs of how the total costs of the apparel section change as the total number of t-shirts sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of t-shirts sold.) Requirement a. Classify each cost item (A-H) as direct or indirect (D or I) costs of the total number of t-shirts sold. Cost Item D or I A. Annual fee for licensing the school logo B. Cost of store manager's salary C. Costs of t-shirts purchased for sale to customers D. Subscription to College Apparel Trends magazine E. Leasing of computer software used for financial budgeting at the ECS store F. Cost of coffee provided free to all customers of the ECS store G. Cost of cleaning the store every night after closing H. Freight-in costs of t-shirts purchased by ECS Requirement b. Classify each cost item (A-H) as variable or fixed (V or F) costs of how the total costs of the apparel section change as the total number of t-shirts sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of t-shirts sold.) Cost Item V or F A. Annual fee for licensing the school logo B. Cost of store manager's salary C. Costs of t-shirts purchased for sale to customers D. Subscription to College Apparel Trends magazine E. Leasing of computer software used for financial budgeting at the ECS store F. Cost of coffee provided free to all customers of the ECS store G. Cost of cleaning the store every night after closing H. Freight-in costs of t-shirts purchased by ECS

Essential College Supplies (ECS) is a store on the campus on a large Midwestern university. The store has both an apparel section (t-shirts with the school logo) and a convenience section. ECS reports revenues for the apparel section separately from the convenience section. Requirement Classify each cost item (A-H) as follows: a. Direct or indirect (D or I) costs of the total number of t-shirts sold. b. Variable or fixed (V or F) costs of how the total costs of the apparel section change as the total number of t-shirts sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of t-shirts sold.) Requirement a. Classify each cost item (A-H) as direct or indirect (D or I) costs of the total number of t-shirts sold. Cost Item D or I A. Annual fee for licensing the school logo B. Cost of store manager's salary C. Costs of t-shirts purchased for sale to customers D. Subscription to College Apparel Trends magazine E. Leasing of computer software used for financial budgeting at the ECS store F. Cost of coffee provided free to all customers of the ECS store G. Cost of cleaning the store every night after closing H. Freight-in costs of t-shirts purchased by ECS Requirement b. Classify each cost item (A-H) as variable or fixed (V or F) costs of how the total costs of the apparel section change as the total number of t-shirts sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of t-shirts sold.) Cost Item V or F A. Annual fee for licensing the school logo B. Cost of store manager's salary C. Costs of t-shirts purchased for sale to customers D. Subscription to College Apparel Trends magazine E. Leasing of computer software used for financial budgeting at the ECS store F. Cost of coffee provided free to all customers of the ECS store G. Cost of cleaning the store every night after closing H. Freight-in costs of t-shirts purchased by ECS

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 4EA: The following information is from Daves Sporting Goods. Daves is a Midwest sporting goods store with...

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Question

Essential College Supplies

(ECS)

is a store on the campus on a large Midwestern university. The store has both an apparel section (t-shirts with the school logo) and a convenience section.

ECS

reports revenues for the apparel section separately from the convenience section.

Requirement

Classify each cost item

(A-H)

as follows:

a.	Direct or indirect (D or I) costs of the total number of t-shirts sold.
b.	Variable or fixed (V or F) costs of how the total costs of the apparel section change as the total number of t-shirts sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of t-shirts sold.)

Requirement a. Classify each cost item

(A-H)

as direct or indirect (D or I) costs of the total number of t-shirts sold.

Cost Item	D or I
A.	Annual fee for licensing the school logo
B.	Cost of store manager's salary
C.	Costs of t-shirts purchased for sale to customers
D.	Subscription to College Apparel Trends magazine
E.	Leasing of computer software used for financial budgeting at the ECS store
F.	Cost of coffee provided free to all customers of the ECS store
G.	Cost of cleaning the store every night after closing
H.	Freight-in costs of t-shirts purchased by ECS

Requirement b. Classify each cost item

(A-H)

as variable or fixed (V or F) costs of how the total costs of the apparel section change as the total number of t-shirts sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of t-shirts sold.)

Cost Item	V or F
A.	Annual fee for licensing the school logo
B.	Cost of store manager's salary
C.	Costs of t-shirts purchased for sale to customers
D.	Subscription to College Apparel Trends magazine
E.	Leasing of computer software used for financial budgeting at the ECS store
F.	Cost of coffee provided free to all customers of the ECS store
G.	Cost of cleaning the store every night after closing
H.	Freight-in costs of t-shirts purchased by ECS

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