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Cape Cod Shirt Shop Manufactures T

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User Generated
Subject
Accounting
School
New England College
Type
Homework
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Cape Cod Shirt Shop manufactures T-shirts and decorates them with custom designs for retail
sale on the premises. Several costs incurred by the company are listed below. For each cost,
indicate which of the following classifications best describe the cost. More than one
classification may apply to the same cost item. For purposes of classifying costs as fixed or
variable, assess cost behavior relative to the output quantity of finished T-shirts. (If your answer
is "No" leave the cells blank.)
Cost Items
Variable or
fixed
Period or
product
Administrative
Selling
1
Cost of fabric used in T-shirts
Variable
Product
2
Wages of shirt markers
Variable
Product
3
Cost of new sign in front of
retail T-shirt shop
Fixed
Period
Selling
4
Wages of the employee who
repairs the firm’s sewing
machines.
Variable
Product
5
Cost of electricity used in the
sewing department.
Fixed
Product
Administrative
6
Wages of T-shirt designers and
painters.
Variable
Product
7
Wages of sales personnel.
Variable
Product
8
Depreciation on sewing
machines.
Fixed
Period
Administrative
9
Rent on the building. Part of the
building’s first floor is used to
make and paint T-shirts. Part of
it is used for the retail sales
shop. The second floor is used
for administrative offices and
storage of raw material and
finished goods.
Fixed
Period
Administrative
10
Cost of daily advertisements in
local media.
Fixed
Period
Administrative
Selling
11
Wages of designers who
experiment with new fabrics,
paints, and T-shirt designs.
Variable
Product
Selling
12
Cost of hiring a pilot to fly
along the beach pulling a
banner advertising the shop.
Fixed
Period
Administrative
Selling
13
. Salary of the owner’s secretary
Fixed
Period
Administrative
14
Cost of repairing the gas
furnace
Fixed
Period
15
Cost of insurance for the
production employees.
Fixed
Period
Administrative

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Cape Cod Shirt Shop manufactures T-shirts and decorates them with custom designs for retail sale on the premises. Several costs incurred by the company are listed below. For each cost, indicate which of the following classifications best describe the cost. More than one classification may apply to t ...
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