(Solved by Humans)-PROBLEM 2–16 Classification of Costs as Variable or Fixed and Direct or Indirect [LO1, LO2, LO5,...

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  PROBLEM 2–16 Classification of Costs as Variable or Fixed and Direct or Indirect [LO1, LO2, LO5, LO6] Listed below are costs found in various organizations. 1.       Depreciation, executive jet. 2.       Costs of shipping finished goods to customers. 3.       Wood used in manufacturing furniture. 4.       Sales manager’s salary. 5.       Electricity used in manufacturing furniture. 6.       Salary of the secretary to the company president. 7.     Aerosol attachment placed on a spray can produced by the company. 8.       Billing costs. 9.      Packing supplies for shipping products overseas. 10.        Sand used in manufacturing concrete. 11.        Supervisor’s salary, factory. 12.        Executive life insurance. 13.        Sales commissions. 14.       Employee benefits, assembly-line workers. 15.       Advertising costs. 16.        Property taxes on warehouses used to store finished goods. 17.     Lubricants for production equipment. Required: Prepare an answer sheet with column headings as shown below. For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold, and then whether it would be a selling cost, an administrative cost, or a product cost. If it is a product cost, indicate whether it would typically be treated as a direct or an indirect cost with respect to units of product. Three sample answers are provided for  illustration:   www.tex-cetera.com         Cost Item Variable or Fixed Selling Cost Administrative Cost     Product Cost        Direct          Indirect Direct labour Executive salaries Factory rent V F F     X X   X