Task: Classify the cost items as direct or indirect, fixed or variable.
Cost Item D or I F or V
a. Salary of the production department manager who oversees manufacturing.
b. Salaries of company founders.
c. Cardboard trays used to package sets of 12 specialty biscuits.
d. Salary of the Web graphics designer who prepares the online illustrations and layout.
e. Annual maintenance service agreement for the conveyor belt.
f. Wages paid to assembly line workers who mix ingredients in batches.
g. Utilities such as water, electricity, waste for the warehouse.
h. Cost of ingredients
The company sells dog cookies to Wal-Mart to sell in their stores, is this considered a period cost or an inventoriable cost? What costs can Wal-Mart include as part of the purchase cost?