The following are costs associated with manufacturing firms, or service firms:

A. Miscellaneous materials used in production
B. Salesperson’s commission in real estate firm
C. Administrators’ salaries for a furniture wholesaler
D. Administrators’ salaries for a furniture manufacturer
E. Freight costs associated with acquiring inventories for a grocery store
F. Office managers salary in a doctors office
G. Utilities for the corporate offices of a toy manufacturer
H. Line supervisors salary for a clothing manufacturing firm
I. Training seminar for sales staff of a service firm
J. Fuel used in a trucking firm
K. Paper used at a printing business
L. Oil for machinery at a plastics manufacturing firm
M. Food used at a restaurant
N. Windshields used for a car manufacturer


Classify the cost as (1) product or period (2) variable or fixed; and (3) for those that are product-costs, direct materials, direct labor, or manufacturing overhead. Write “not applicable (N/A)(: if a category doesn’t apply.
This is what I got, but I am always worried when I have a lot of one answer. Any help is much appreciated!
a) 1-Product 2-Variable 3-Manufactoring Overhead
b) 1-Period 2-Variable 3- N/A
c) 1-Period 2-Fixed 3-N/A
d) 1-Period 2-Fixed 3-Direct labor
e) 1-Period 2-Variable 3-N/A
f) 1-Period 2-Fixed 3-N/A
g) 1-Period 2-Variable 3-N/A
h) 1-Period 2-Fixed 3-Direct labor
I) 1-Product 2-Variable 3-Direct labor
j) 1-Period 2-Variable 3-N/A
k) 1-Product 2-Variable 3-Direct material
l) 1-Period 2-Variable 3-Manufactoring overhead

First, thank you for finally starting your own thread for this instead of tagging onto someone else's thread. I did not attempt to answer it because it got a bit frustrating scrolling from your answers (only) back up to the original question. Much easier when you put it in your own thread altogether in the same post.


This is what I got, but I am always worried when I have a lot of one answer.

That is irrelevant. You never know what someone will do with a problem -- there's really nothing wrong with having answer "A" 10 times in a row. Don't let that throw you off. Many of things in the list are not related to production because they aren't manufacturing companies.


e) 1-Period 2-Variable 3-N/A

That's a bit of an unfair question. It's more of an incremental cost. But I'll pretend if you must pick one, that variable seems logical.


g) 1-Period 2-Variable 3-N/A

In an office this in all probability fixed. What is the "variance" based on?


h) 1-Period 2-Fixed 3-Direct labor

Product cost - related to production. It's also overhead. "Salary" is a clue word there.


i) 1-Product 2-Variable 3-Direct labor

Totally off. Where's the product? And if no product, we don't answer #3. As for variable, kind of unfair. I don't know how you could know this.


l) 1-Period 2-Variable 3-Manufactoring overhead

#3 only counts when #1 is a product cost. That should be a clue something is wrong. It's a product cost.

Thanks for the help! I also realized that I did not post the last two answers so here those are as well:

m) 1-Product 2-Variable 3-Direct material
n) 1-Product 2-Variable 3-Direct material

It looks like I am mostly right in what I have with the few exceptions that you pointed out... is that fair to assume? Your help is greatly appreciated!! This class has been a rough one!

Basically, if I don't say something about something, then it's correct. Unless I miss something of course.

Do keep in mind that with managerial, and especially stuff like this, there are things that get into opinion. I don't always agree with the author or the instructor or other people. For the sake of class, the instructor's opinion is the only one that counts. :-)

Thanks Again!! It has been a huge help!:)

Demruage cost should be include in cost or should be add profit & loss a/c