Acc/531 Week 4
Text Discussion Questions and Exercises:
• Chapter 15: Discussion Question 9.
How do variable costs and fixed costs differ? Give an example of each.
Fixed costs are costs that will be the same for the next year. In my Construction Business fixed costs are office rent, office utilities, advertising costs, etc. In a year, these costs can be known ahead of time and won't need to change even if my company does more work. Variable costs are costs that can rise or fall depending on how much work I contract. Say I sign up 20 jobs this year, I will have to hire more employees, buy them trucks, rent them cell phones, and those costs will correspond to the amount of work going on, therefore variable.
• Chapter 15: Discussion Question 16.
What …show more content…
a. Revenue lost from sale of cakes by deciding to sell only cookies
b. Wages paid to construction workers
c. Materials used to assemble computers
d. Ordering costs related to a customer’s special order of guitar strings
e. Rent paid for the use of a factory building
• Exercise 15-23
Cost Classifications
The following are costs associated with manufacturing firms, merchandising firms, or service firms:
A. Miscellaneous materials used in production (3)
B. Salesperson’s commission in real estate firm (2)
C. Administrators’ salaries for a furniture wholesaler (2)
D. Administrators’ salaries for a furniture manufacturer (2)
E. Freight costs associated with acquiring inventories for a grocery store (2)
F. Office managers salary in a doctors office (1)
G. Utilities for the corporate offices of a toy manufacturer (2)
H. Line supervisors salary for a clothing manufacturing firm (2)
I. Training seminar for sales staff of a service firm (N/A)
J. Fuel used in a trucking firm (1)
K. Paper used at a printing business (1)
L. Oil for machinery at a plastics manufacturing firm (1)
M. Food used at a restaurant (1)
N. Windshields used for a car manufacturer
• Chapter 15: Discussion Question 9.
How do variable costs and fixed costs differ? Give an example of each.
Fixed costs are costs that will be the same for the next year. In my Construction Business fixed costs are office rent, office utilities, advertising costs, etc. In a year, these costs can be known ahead of time and won't need to change even if my company does more work. Variable costs are costs that can rise or fall depending on how much work I contract. Say I sign up 20 jobs this year, I will have to hire more employees, buy them trucks, rent them cell phones, and those costs will correspond to the amount of work going on, therefore variable.
• Chapter 15: Discussion Question 16.
What …show more content…
a. Revenue lost from sale of cakes by deciding to sell only cookies
b. Wages paid to construction workers
c. Materials used to assemble computers
d. Ordering costs related to a customer’s special order of guitar strings
e. Rent paid for the use of a factory building
• Exercise 15-23
Cost Classifications
The following are costs associated with manufacturing firms, merchandising firms, or service firms:
A. Miscellaneous materials used in production (3)
B. Salesperson’s commission in real estate firm (2)
C. Administrators’ salaries for a furniture wholesaler (2)
D. Administrators’ salaries for a furniture manufacturer (2)
E. Freight costs associated with acquiring inventories for a grocery store (2)
F. Office managers salary in a doctors office (1)
G. Utilities for the corporate offices of a toy manufacturer (2)
H. Line supervisors salary for a clothing manufacturing firm (2)
I. Training seminar for sales staff of a service firm (N/A)
J. Fuel used in a trucking firm (1)
K. Paper used at a printing business (1)
L. Oil for machinery at a plastics manufacturing firm (1)
M. Food used at a restaurant (1)
N. Windshields used for a car manufacturer