for each of the following costs, identify whether it is a fixed, variable or both:\n| cost | type…

for each of the following costs, identify whether it is a fixed, variable or both:\n| cost | type |\n|--|--|--|\n| wages of assembly - line workers | variable |\n| depreciation—office equipment | |\n| glue and fasteners | |\n| delivery costs | |\n| raw materials handling costs | |\n| salary of marketing manager | fixed |\n| production run setup costs | |\n| plant utilities | |\n| electricity cost of manufacturing plant | |\n| research and development expenses | |

for each of the following costs, identify whether it is a fixed, variable or both:\n| cost | type |\n|--|--|--|\n| wages of assembly - line workers | variable |\n| depreciation—office equipment | |\n| glue and fasteners | |\n| delivery costs | |\n| raw materials handling costs | |\n| salary of marketing manager | fixed |\n| production run setup costs | |\n| plant utilities | |\n| electricity cost of manufacturing plant | |\n| research and development expenses | |

Answer

Brief Explanations:

  • Depreciation - office equipment: Fixed as it doesn't vary with production volume.
  • Glue and fasteners: Variable as usage depends on production quantity.
  • Delivery costs: Can be both. Some fixed (e.g., vehicle lease) and some variable (e.g., fuel based on distance).
  • Raw materials handling costs: Variable as it depends on amount of raw - materials handled.
  • Production run setup costs: Fixed for a particular production run but can vary if number of runs changes.
  • Plant utilities: Can be both. Base charges are fixed, but usage can vary with production level.
  • Electricity cost of manufacturing plant: Can be both. Base charge is fixed, and usage cost varies with production.
  • Research and development expenses: Usually fixed as they are not directly tied to production volume in short - term.

Answer:

Depreciation—office equipment: Fixed Glue and fasteners: Variable Delivery costs: Both Raw materials handling costs: Variable Production run setup costs: Both Plant utilities: Both Electricity cost of manufacturing plant: Both Research and development expenses: Fixed