Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 17E
Classifying Variable and Fixed Costs and Product and Period Costs
Below are listed various costs that are found in organizations.
1. Hamburger buns in a Wendy’s restaurant.
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 IBMs corporate headquarters.
7. Salary of a supervisor overseeing production of printers at Hewlett-Packard.
8. Commissions paid to automobile salespersons.
9.
10. Steering wheels installed in BMWs.
Required:
Using the table shown below, describe each of the costs mentioned above in two ways. In termsof cost classifications for predicting cost behaviour (column 1), indicate whether the cost is fixed or variable with respect to the number of units produced and sold. With respect to costclassifications for preparing financial statements (column 2), indicate whether the item is a product cost or period cost (selling and administrative cost).
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Students have asked these similar questions
Classifying Variable and Fixed Costs and Product and Period Costs
Below are listed various costs that are found in organizations.
1. Hamburger buns in a Wendy’s restaurant.
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.
Required:
Using the table shown below, describe each of the costs mentioned above in two ways. In terms of cost classifications for predicting cost behavior (column 1), indicate whether the cost is fixed or variable with respect to the number of units produced and sold. With respect to cost classifications for preparing…
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 period or a product cost.
Cost Item Predicting Cost Behavior Preparing Financial Statements
1.Hamburger buns in a Wendy’s restaurant.
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.
Classify the following costs of this new product as direct materials, direct labor,
manufacturing overhead, selling, or administrative
1. President's salary.
2. Packages used to hold the skin wipes.
3. Cleaning materials used to clean the skin wipe
packages.
4. Wages of workers who package the product.
5. Cost of advertising the product.
6. The salary of the supervisor of the workers
who package the product.
7. Cost accountant's salary (the accountant works
in the factory).
8. Cost of a market research survey.
9. Sales commissions paid as a percent of sales.
10. Depreciation of administrative office building.
Problem B Classify the costs listed in the previous
problem as either product costs or period costs.
Chapter 1 Solutions
Introduction To Managerial Accounting
Ch. 1 - What are the three major types of product costs in...Ch. 1 - Define the following: (a) Direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - What effect does an increase in the activity level...Ch. 1 - Define the following terms: (a) Costbehavior and...Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Managers often assume a strictly linear...Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...
Ch. 1 - What is the difference between a traditional...Ch. 1 - Prob. 12QCh. 1 - Define the following terms: differential cost,...Ch. 1 - Only variable costs can be differential costs. Do...Ch. 1 - Prob. 1AECh. 1 - This Excel worksheet form is to be used to...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Prob. 4F15Ch. 1 - Prob. 5F15Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Prob. 8F15Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Prob. 15F15Ch. 1 - Identifying Direct and Indirect Costs Northwest...Ch. 1 - Prob. 2ECh. 1 - Classifying Costs as Product or Period Costs...Ch. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Traditional and Contribution Format Income...Ch. 1 - Direct and Indirect CostsKubin Company’s relevant...Ch. 1 - Product Costs and Period Costs; Variable and Fixed...Ch. 1 - Fixed, Variable, and Mixed Costs Refer to the data...Ch. 1 - Differential Costs and Sunk Costs Refer to the...Ch. 1 - Cost Behavior; Contribution Format Income...Ch. 1 - Product and Period Cost Flows The Devon Motor...Ch. 1 - Prob. 13ECh. 1 - Cost Classification Wollogong Group Ltd. of New...Ch. 1 - Traditional and Contribution Format Income...Ch. 1 - Cost Classifications for Decision Making Warner...Ch. 1 - Classifying Variable and Fixed Costs and Product...Ch. 1 - PROBLEM 1—18 Direct and Indirect Costs; Variable...Ch. 1 - Traditional and Contribution Format Income...Ch. 1 - Variable and Fixed Costs; Subtleties of Direct and...Ch. 1 - Traditional and Contribution Format Income...Ch. 1 - Cost Terminology; Contribution Format Income...Ch. 1 - Cost Classification Listed below are costs found...Ch. 1 - Different Cost Classifications for Different...Ch. 1 - Traditional and Contribution Format Income...
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