Cost behavior and cost classifications are key components to
efficiently utilizing managerial accounting techniques. In order to
make decisions, accountants and managers must be able to correctly
identify and classify each cost associated with a given product or
service.
Using your personal knowledge or the internet to select a product or service. The product or service does not have to be an actual product or service – it can be completely fictional. For the selected product or service, identify at least 5 costs involved with the product or service and complete the following questions.
- Classify each cost as direct or indirect.
- Identify the cost behavior as either variable, fixed or mixed.
- Provide a brief (2 or 3 sentences) on the relationship of these costs.
Please note you will need to make some assumptions about the product
or service. Internal product information is generally not available to
the public so you will need to make some educated guesses about what may
be required.
Here is an example to help get you started:
Product: toothbrush
Costs:
- Plastic for handle (direct materials, variable)
- Material for bristles (direct materials, variable)
- Plant electricity to run equipment (indirect, fixed)
- Labor to assemble each toothbrush (direct labor, variable)
- Glue/Adhesive to hold bristles (indirect, variable)
Relationship: As the number of toothbrushes made
increases, the direct materials and direct labor will also increase to
meet the demand. Electricity is required to operate other aspects in
addition to the equipment so this a shared cost across all functions.
Electricity is necessary cost for all operations and not solely for the
production of toothbrushes.
Please submit your assignment. Assignment Details
This discussion has 2 parts:
- Looking at probability in research; which do you believe is the best approach between classical, empirical, or subjective? Explain.
- When working with research, would you rather use conditional or joint probability? Explain.
Your assignment will be graded in accordance with the following criteria. Click here to view the grading rubric.