Classify Costs Peak Apparel Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue jeans: Instructions: Identify each cost listed below as a variable cost, fixed cost, or mixed cost. a. Shipping boxes used to ship orders b. Consulting fee of $200,000 paid to industry specialist for marketing advice c. Straight-line depreciation on sewing machines d. Salesperson’s salary, $10,000 plus 2% of the total sales e. Fabric f. Dye g. Thread h. Salary of designers i. Brass buttons j. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour k. Insurance premiums on property, plant, and equipment, $70,000 per year plus $5 per $30,000 of insured value over $8,000,000 l. Rental costs of warehouse, $5,000 per month plus $4 per square foot of storage used m. Supplies n. Leather for patches identifying the brand on individual pieces of apparel o. Rent on plant equipment, $50,000 per year p. Salary of production vice president q. Janitorial services, $2,200 per month r. Wages of machine operators s. Electricity costs of $0.10 per kilowatt-hour t. Property taxes on property, plant, and equipment
Classify Costs Peak Apparel Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue jeans: Instructions: Identify each cost listed below as a variable cost, fixed cost, or mixed cost. a. Shipping boxes used to ship orders b. Consulting fee of $200,000 paid to industry specialist for marketing advice c. Straight-line depreciation on sewing machines d. Salesperson’s salary, $10,000 plus 2% of the total sales e. Fabric f. Dye g. Thread h. Salary of designers i. Brass buttons j. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour k. Insurance premiums on property, plant, and equipment, $70,000 per year plus $5 per $30,000 of insured value over $8,000,000 l. Rental costs of warehouse, $5,000 per month plus $4 per square foot of storage used m. Supplies n. Leather for patches identifying the brand on individual pieces of apparel o. Rent on plant equipment, $50,000 per year p. Salary of production vice president q. Janitorial services, $2,200 per month r. Wages of machine operators s. Electricity costs of $0.10 per kilowatt-hour t. Property taxes on property, plant, and equipment
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1PA: Classify costs Seymour Clothing Co. manufactures a variety of clothing types for distribution to...
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Question
Classify Costs
Peak Apparel Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue jeans:
Instructions:
Identify each cost listed below as a variable cost, fixed cost, or mixed cost.
a. | Shipping boxes used to ship orders | |
b. | Consulting fee of $200,000 paid to industry specialist for marketing advice | |
c. | Straight-line |
|
d. | Salesperson’s salary, $10,000 plus 2% of the total sales | |
e. | Fabric | |
f. | Dye | |
g. | Thread | |
h. | Salary of designers | |
i. | Brass buttons | |
j. | Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour | |
k. | Insurance premiums on property, plant, and equipment, $70,000 per year plus $5 per $30,000 of insured value over $8,000,000 | |
l. | Rental costs of warehouse, $5,000 per month plus $4 per square foot of storage used | |
m. | Supplies | |
n. | Leather for patches identifying the brand on individual pieces of apparel | |
o. | Rent on plant equipment, $50,000 per year | |
p. | Salary of production vice president | |
q. | Janitorial services, $2,200 per month | |
r. | Wages of machine operators | |
s. | Electricity costs of $0.10 per kilowatt-hour | |
t. | Property taxes on property, plant, and equipment |
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