Exercise 3-20 Variable and Fixed Costs a.Power to operate a drill (to drill hole
ID: 3004049 • Letter: E
Question
Exercise 3-20 Variable and Fixed Costs a.Power to operate a drill (to drill holes in the wooden frames of the futons) b.Cloth to cover the futon mattress c.Salary of the factory receptionist d.Cost of food and decorations for the annual Fourth of July party for all factory employees e.Fuel for a forklift used to move materials in a factory f.Depreciation on the factory g.Depreciation on a forklift used to move partially completed goods h.Wages paid to workers who assemble the futon frame i.Wages paid to workers who maintain the factory equipment j.Cloth rags used to wipe the excess stain off the wooden frames
Explanation / Answer
a.Power to operate a drill (to drill holes in the wooden frames of the futons) - Variable Costs
b.Cloth to cover the futon mattress - Variable Costs
c.Salary of the factory receptionist - Fixed Cost, since salary of the factory receptionist will be on monthly basis and will not be going to change
d.Cost of food and decorations for the annual Fourth of July party for all factory employees - Fixed Cost
e.Fuel for a forklift used to move materials in a factory - Variable Costs, depending on the time machinery has been used will determine the requirement of fuel
f.Depreciation on the factory - Fixed Cost
g.Depreciation on a forklift used to move partially completed goods - Fixed Cost
h.Wages paid to workers who assemble the futon frame - Variable Costs
i.Wages paid to workers who maintain the factory equipment - Fixed Cost
j.Cloth rags used to wipe the excess stain off the wooden frames - Variable Costs
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