FA 1: Intro to Cost Acc

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Cost Classi!cation and Behavior

10. Bench Co. manufactures T-shi"s and decorates them with custom designs
for retail sale on the premises. Several costs incurred by the company are listed
below. Classify each cost as Product or Period cost and Variable or Fixed cost. *

Product Cost Period Cost Variable cost Fixed Cost

Cost of fabric
used in T-shirts.

Wages of
shirtmakers.

Cost of new sign

in front of retail T-
shrt shop.

Wages of the
employee who
repairs the Irm's
sewing machines

Cost of electricity
used in the
sewing
department

Wages of T-shirt
designers and
painters.

Salaries of sales
personnel.

Depreciation on
sewing
machines.

Rent on the
factory building.

Cost of daily
advertisement in
local media.

Wages of
designers
designers who
experiment with
new fabrics,
paints, and T-shirt
designs.

Salary of the
owner's
secretary.

Cost of insurance
for the producion
employees.

Salary of the
accountant.

Depreciation of
the store
equipment
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