FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Classify costs
Seymour Clothing 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:

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 587 per hour

k. Insurance premiums on property, plant, and equipment, $70,000 per
year plus $5 per 530,000 of insured value over $8,000,000
1. Rental costs of warehouse, $5,000 per month plus $4 per square foot o
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
Instructions

Classify the preceding costs as fixed, variable, or mixed. Use the
following tabular headings and place an X in the appropriate column.
Identify each cost by letter in the cost column.

Fixed Cost Cost Mixed Cost  Variable Cost
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