Question

Kater Company manufactures shelving units. The company receives pre-cut wood, drills holes in the wood so that movable shelves may be installed, then assembles and paint the units. Classify each of the following items of factory overhead as either fixed or variable cost.
a. Supervisor of the Drilling Department
b. Oil used to lubricate drill press machines
c. Propane for forklift trucks used to move the material from the Drilling Department to the Assembly Department
d. Natural gas used to heat the plant
e. Security guard
f. Insurance on factory building
g. Electricity to power drill press machines
h. Rent of factory building

Answer 1

Answer: Please see below for answers.

Explanation:

Variable costs are referred to as  costs  incurred to a company which change  as the  volume of production by the company or business changes   that is  when the volume of production increases, the costs increases , and decreases with decreased production.

Fixed costs  are expenses incurred to a company which do not change in relation to the volume of production by the company or business that is  when the volume of production increases or decreases, the  costs remains the same.

a. Supervisor of the Drilling Department----- Fixed cost

b.Oil used to lubricate drill press machines---- Variable cost

c.Propane for forklift trucks used to move the material from the Drilling      Department to the Assembly Department---- Variable cost

e.Natural gas used to heat the plant----- Variable cost

f.Security guard---- fixed cost s

g.Insurance on factory building----- Fixed costs

h.Electricity to power drill press machines---- Variable costs

.i Rent of factory building-Fixed costs