Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 17

Classify costs
Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue jeans:
a. Shipping boxes used to ship orders
b. Consulting fee of $200,000 paid to industry specialist for marketing advice
c. Straight-line depreciation on sewing machines
d. Salesperson's salary, $10,000 plus 2% of the total sales
e. Fabric
f. Dye
g. Thread
h. Salary of designers
i. Brass buttons
j. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $50,000 plus $87 per hour
k. Insurance premiums on property, plant, and equipment, $70,000 per year plus $5 per $30,000 of insured value over $8,000,000
l. Rental costs of warehouse, $5,000 per month plus $4 per square foot of storage used
m. Supplies
n. Leather for patches identifying the brand on individual pieces of apparel
o. Rent on plant equipment, $50,000 per year
p. Salary of production vice president
q. Janitorial services, $2,200 per month
r. Wages of machine operators
s. Electricity costs of $0.10 per kilowatt-hour
t. Property taxes on property, plant, and equipment
Instructions
Classify the preceding costs as either fixed, variable, or mixed. Use the following tabular headings and place an X in the appropriate column. Identify each cost by letter in the cost column.