Question

Identify and classify all the costs between

1. direct or indirect,

2. product cost or period cost

3.fixed, mixed, or variable

In a company that manufactures tables

- Administrative Office Rent 20 k a year

- Warehouse rent for 30k a year

- Admin Staff -200k a year

- Outsourced Firm managing sales charging commision of 90 dollars per sale

- Invoicing System outsourced - $1 per sale

- Admin Office miscelanous expenses of 7k ( stationary ) expected to stay this way for years

- Full time employee at the warehouse - supervising casual staff for 90k a year

- Ware house miseallanous expenses of 7k - expected to stay the same

- Delivery firm charges for delviery of the tables to customers - delivery cost affected by amount of units delviered

- Material costs for the tables ( timber , Varnish , Bolts etc)

- Manufacturing staff to make the tables 40 dollars an hour

Answer #1

1. Administrative Rent - Indirect Cost - Period Cost - Fixed Cost

2. Warehouse Rent - Indirect Cost - Period Cost - Fixed Cost

3. Admin Staff - Indirect Cost - Period Cost - Fixed Cost

4. Outsourced firm sales commission - Indirect Cost - Period Cost - Variable Cost

5. Invoicing system - Indirect Cost - Period Cost - Variable Cost

6. Admin office miscellaneous expenses - Indirect Cost - Period Cost - Fixed Cost

7. Full time employee at warehouse - Indirect Cost - Period Cost - Fixed Cost

8. Warehouse miscellaneous expenses - Indirect Cost - Period Cost - Fixed Cost

9. Delivery Firm Charges - Indirect Cost - Period Cost - Variable Cost

10. Material Cost - Direct Cost - Product Cost - Variable Cost

11. Manufacturing Staff - Direct Cost - Product Cost - Variable Cost

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