Answer:
Explanation:
There is the relation between the variable cost and the product cost & fixed cost and the period cost
The product cost is that cost which is used to make the product. It includes direct material, direct labor, and the manufacturing overhead
In mathematically,
Product cost = Direct material + direct labor + manufacturing overhead
The period cost is that cost which remain fixed and is incurred when the time passes
Period cost = Salaries of sales person + delivery trucks depreciation + Repairs to office equipment + Advertising expense + usage of office supplies expense
So, the categorization is shown below:
Lumber used to construct decks ($12.00 per square foot) = Variable cost and Product cost
Carpenter labor used to construct decks ($10 per hour) = Variable cost and Product cost
Construction supervisor salary ($45,000 per year) = Fixed cost and the period cost
Depreciation on tools and equipment ($6,000 per year) = Fixed cost and the period cost
Selling and administrative expenses ($35,000 per year) = Fixed cost and the period cost
Rent on corporate office space ($34,000 per year) = Fixed cost and the period cost
Nails, glue, and other materials required to construct deck (varies per job) =
Variable cost and Product cost
