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The Following Is a List of Various Costs of Producing

Question 215

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The following is a list of various costs of producing sweatshirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.

Premises:
Electricity costs of $.038 per kilowatt-hour.
Salary of the production supervisor.
Accounting salaries.
Warehouse rent of $8,000 per month plus $.50 per square foot of storage used.
Property taxes on factory, building, and equipment.
Color dyes for producing different colors of sweatshirts.
Leather used to make a handbag.
Patterns for different designs. Patterns typically last many years before being replaced.
Hourly wages of sewing machine operators.
Straight-line depreciation on sewing machines.
Janitorial costs of $4,000 per month.
Thread.
Cotton and polyester cloth.
Advertising costs of $12,000 per month.
Maintenance costs with sewing machine company. The cost is $2,000 per year plus $.001 for each machine hour of use.
Responses:
mixed
fixed
variable

Correct Answer:

Electricity costs of $.038 per kilowatt-hour.
Salary of the production supervisor.
Accounting salaries.
Warehouse rent of $8,000 per month plus $.50 per square foot of storage used.
Property taxes on factory, building, and equipment.
Color dyes for producing different colors of sweatshirts.
Leather used to make a handbag.
Patterns for different designs. Patterns typically last many years before being replaced.
Hourly wages of sewing machine operators.
Straight-line depreciation on sewing machines.
Janitorial costs of $4,000 per month.
Thread.
Cotton and polyester cloth.
Advertising costs of $12,000 per month.
Maintenance costs with sewing machine company. The cost is $2,000 per year plus $.001 for each machine hour of use.
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