Explanation Costs found in various organizations: Property Taxes, factory Boxes used for packaging detergent produced by the company Salesperson’s commissions Supervisor’s salary, factory Depreciation executive autos. Wages of worker assembling computers Insurance, finished goods, warehouse Lubricant for production equipment Advertising costs Microchips used in producing calculator Shipping cost on merchandise sold Magazine subscription and factory lunchroom Thread in a garment factory Executive life insurance Ink used in textbook production Fringe benefit , material handling workers Yarn used in sweater production Wages of receptionist, executive offices. Classification of cost is a very important task for an accountant. Since each and every cost has its own importance, a wrong classification will have a bad effect on the analysis done based on the financial statements done considering these values. We should keep in the following facts: Fixed cost is always fixed or constant and is not dependent on the changes of volume of production or activities. Variable cost always varies according to the volume of production of other activities and hence is direct costs...

5th Edition

ISBN: 9781259969485

Author: Noreen

Publisher: RENT MCG

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Question

Chapter 1, Problem 1.23P

To determine

Introduction:

Cost: Nothing in this world is free. To get something, we have to pay in return. The payment is made in cash or in kind. Cost can be referred to that amount which has to be paid to get something in return. Cost can be valued monetarily.

To evaluate: The costs and classify them into direct costs, indirect costs, fixed cost and variable cost.

Expert Solution & Answer

Chapter 1 Solutions

MANAGERIAL ACCOUNTING F/MGRS.

Ch. 1 - Prob. 1.1Q Ch. 1 - Prob. 1.2Q Ch. 1 - Prob. 1.3Q Ch. 1 - Prob. 1.4Q Ch. 1 - Prob. 1.5Q Ch. 1 - Prob. 1.6Q Ch. 1 - Prob. 1.7Q Ch. 1 - Prob. 1.8Q Ch. 1 - Prob. 1.9Q Ch. 1 - Prob. 1.10Q

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