E15 – 8 Cost Classifications - The following are costs associated with manufacturing firms, merchandising firms, or service firms

E15 – 8 Cost Classifications - The following are costs associated with manufacturing firms, merchandising firms, or service firms:

a. Miscellaneous materials used in production

b. Salesperson’s commission in a real estate firm

c. Administrators’ salaries for a furniture wholesaler

d. Administrators’ salaries for a furniture manufacturer

e. Freight costs associated with acquiring inventories for a grocery store

f. Office manager’s salary in a doctor’s office

g. Utilities for the corporate offices of a toy manufacturer

h. Line supervisor’s salary for a clothing manufacturing firm

i. Training seminar for sales staff of a service firm

j. Fuel used in a trucking firm

k. Paper used at a printing business

l. Oil for machinery at a plastics manufacturing firm

m. Food used at a restaurant

n. Windshields used for a car manufacturer

Classify the costs as (1) product or period; (2) variable or fixed; and (3) for those that are product costs, as direct materials, direct labor, or manufacturing overhead. Write “not applicable (N/A)” if a category doesn’t apply.

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