Cost Classification (Fixed Cost, Variable Costs, Mixed Costs)
a. Wood for framing the sofas:
b. Salary of production vice president:
c. Rent on experimental equipment, $50 for every sofa produced:
d. Rental costs of warehouse, $30,000 per month:
e. Insurance premiums on property, plant, and equipment, $25,000 per year plus $25 per $25,000 of insured value over $16,000,000:
f. Consulting fee of $120,000 paid to efficiency specialists:
g. Salesperson’s salary, $80,000 plus 4% of the selling price of each sofa sold:
h. Janitorial supplies, $25 for each sofa produced:
i. Employer’s FICA taxes on controller’s salary of $180,000:
j. Fabric for sofa coverings:
k. Hourly wages of sewing machine operators:
l. Sewing supplies:
m. Salary of designers:
n. Foam rubber for cushion fillings:
o. Electricity costs of $0.13 per kilowatt-hour:
q. Property taxes on property, plant, and equipment:
r. Straight-line depreciation on factory equipment:
s. Cartons used to ship sofas:
t. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $25,000 plus $160 per hour:
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