FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
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:
Required:
Identify each cost listed below as variable costs, fixed costs, 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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