Question

Listed here are product costs for the production of soccer balls. Identify each cost (a) as either fixed or variable and (b) as either direct or indirect.
1. Lace to hold leather together

2. Wages of assembly workers

3. Coolants for machinery

4. Annual flat fee paid for factory security

5. Leather covers for soccer balls

6. Machinery depreciation (straight-line)

7. Taxes on factory

Answer 1

Answer:

a) Fixed or variable and (b) as either direct or indirect.

Explanation:

1. Lace to hold leather together:  indirect cost/ variable

2. Wages of assembly workers : direct cost/ variable

3. Coolants for machinery : indirect cost/ fixed

4. Annual flat fee paid for factory security  : indirect cost/ fixed

5. Leather covers for soccer balls: direct cost/ variable  

6. Machinery depreciation (straight-line): indirect cost/ fixed

7. Taxes on factory: indirect cost/ fixed