different buisness examples Flashcards
what manufacturing business costs incurred
direct labour
plant and equipment
manufacturing overhead
raw materials
what is merchandising business costs incurred
direct labour
plant and equipment
manufacturing overhead
raw materials
what is a service business costs incurred
billing and collections
computer network equipment
professional staff
what is the merchandising businesses fixed costs
Rent, insurance, managers’ salaries
what is the manufacturing businesses fixed costs
Property taxes, insurance, equipment leases
what is the service businesses fixed costs
Rent, straight-line depreciation, administrative salaries, and insurance
what is the variable cost and associated cost driver of a merchandising businesses
variable cost - total monthly hourly wages for sales staff
cost driver - hour’s business is open during month
what is the variable cost and associated cost driver of a manufacturing businesses
variable cost - direct materials used to produce one unit of product
cost driver - number of units produced
what is the variable cost and associated cost driver of a manufacturing businesses
variable cost - cost of laundering linens and towels
cost driver - number of hotel rooms
what is the in total and associated per unit of a variable cost
in total - changes in response to the level of activity
per unit - remains fixed per unit regardless of the level of activity
what is the in total and associated per unit of a fixed cost
in total - does not change with the level of activity, within the relevant range, but does change when the relevant range change
per unit - changes based upon activity within the relevant range: increased activity decreases per-unit cost; decreased activity increases per-unit cost
examples of direct materials of a manufacturing business
birthday cakes
–> flour, sugar, eggs, milk
