as either variable or between costs Exercise 18-2 Cost classification C2 Listed

Question

as either variable or between costs Exercise 18-2 Cost classification C2 Listed here are product costs for the production of soccer balls. Classify each cost (a) fixed and (b) as either direct or indirect. What patterns do you see regarding the relation classified in these two ways? Variable or Fixed Direct or Indirect Product Cost Variable Fixed Direct Indirect I. Leather covers for soccer balls 2. Annual flat fee paid for office security … 3. Coolants for machinery . Wages of assembly workers 5. Lace to hold leather together . . 6. Taxes on factory 7. Machinery depreciation (straight-line)

Explanation / Answer

Please find the answer below :

As we can clearly see, most of the time we will see the variable costs are the direct costs, and the fixed costs are the indirect costs.

Sl No. Product Cost Variable or Fixed Direct or Indirect Variable Fixed Direct Indirect 1 Leather cover for soccer balls Yes - Yes 2 Annual flat fee paid for office security Yes Yes 3 Coolants for machinery Yes Yes 4 Wages of assembly workers Yes Yes 5 Lace to hold the leather together Yes Yes 6 Taxes on factory Yes Yes 7 Machinery depreciation Yes Yes

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