Answer:
Hamilton Company
Cost Classification:
Period Direct Indirect Variable Fixed
Cost Cost Cost Cost Cost
A. Recognized $85,000 in wages for employees who assemble the company's products. $85,000 $85,000
Period Direct Indirect Variable Fixed
Cost Cost Cost Cost Cost
B. Recognized sales commissions
of $68,000 $68,000 $68,000
Period Direct Indirect Variable Fixed
Cost Cost Cost Cost Cost
C. Recognized $48,000 in salaries for
factory supervisors. $48,000 $48,000
Period Direct Indirect Variable Fixed
Cost Cost Cost Cost Cost
D. Recognized $98,000 in salaries for executives (president and vice presidents). $98,000 $98,000
Period Direct Indirect Variable Fixed
Cost Cost Cost Cost Cost
E. Recorded depreciation cost of $35,000. $18,000 was depreciation on factory equipment and $17,000 was depreciation on administrative office equipment $17,000 $18,000 $35,000
Period Direct Indirect Variable Fixed
Cost Cost Cost Cost Cost
F. Advertising expenses for print ads were $15,000 for the year. This cost lead directly to product sales for Hamilton Company.
$15,000 $15,000
Period Direct Indirect Variable Fixed
Cost Cost Cost Cost Cost
G. Utilized $15,000 of Raw Materials, $10,000 of direct and $5,000 of Indirect
$10,000 $5,000 $15,000
Explanation:
a) Period costs: These costs relate to an accounting period or passage of time. For example, advertising expense is a period cost. Some period costs are fixed.
b) Direct costs: These costs are traceable to the cost object. They are attributable to the production of goods or services. They form the elements for the costs of the product.
c) Indirect costs are not directly attributable to the product costs. For example, the cost of indirect materials or labor are not directly related to the product.
d) Costs can be classified into variable and fixed. These depict the behaviors of the cost. Variable costs change with the volume of production, while fixed costs remain constant irrespective of the level of activity, especially in the short-run, because all costs vary in the long-run.
