Sl no.

9
10
11
12

Example
Pulb in paper makin
Daily wages paid in road construction
Sales Man's salary
Sales man's sample

13
14
15
16
17
18

Depreciation of machinery (common for all products)

Monthly rental for leased computer
Fire loss
Commison pade to the sales agency
Commision pade to raw material buying agency
Rent for head office building

19
20
21
22
23
24
25
26

Depreciation for delivery truck with a fixed schedule

of trip every month
Auditor's fee
Batteries for car manufacturer
Insurance premium on company car
Dividend pade to shareholders
Cloth in garment making
Thread in garment making
Lubricating oil for the sewing machine

27
28
29
30
31
32

Depreciation of a chemical processing plant

Power to run the machinery
Electricity to lighten the shop floor
Freight-in
Customs duty for raw material
Royalty to authors in book publishing

33
34
35

Royalty ( one shot payment) for using foreign brand

Helper's wages in a furniture plant
Nail used in a furniture plant

36
37
38
39
40
41
42
43

Advertising expenses
Trade Discount (margin to outlets)
Cash discount (for prompt payment)
Expenses account for government liason
Bribes paid
Donations
Overtime (factory workers)
Idle time ( accounts clerks)

44
45
46
47

Waste of raw material in manufacturing

Bottled perfume: the perfume
Bottled perfume; the bottle
Bottled perfume: the fancy carton for each bottle

48

Cardboard boxex to pack and deliver large orders of

perfume and other toiletries to the retail shop
Civil engineer's salary in a construction firm
Advanced basic research

49
50

Functional M/S/A/O

Traceability D/I

Behaviour V/F

M
M
S
S

D
I
I
I

V
V
V
V

M
A
S
S
A

S
A
M
A
M
M
M

I
I
Loss is Not a Cost
I
I
I

I
I
I
I
Financial Charge and not a Cost
D
D
I

Depends on the
Depreciation
Approach, Mostly Fixed
F
V
V
F
Depends on the
Depreciation
Approach, Mostly Fixed
V
V
F
V
V
V

M
M
M
M
M
M

I
I
I
I
I
I

Depends on the
Depreciation
Approach, Mostly Fixed
V
V
V
V
V

S
M
M

I
D
I

F
V
V

S
S
A

M
A

I
I
Financial Charge and not a Cost
I
Not a Cost
Not a Cost
I
I

F
V
F

V
V

M
M
S

Simlar to Loss and therefore not a cost

D
D
I

V
V
V

S
I
V
D to P&L at the end of theFresearch
Not a Cost ( ItMcan be ammortised and charged
Project

If this is as per the budget of the aggregate company, if

product by product then it might be variable

Classification of Fixed and Vriable Costs

Clasify th

1
2
3
4
5
6
7

Salaries of production supervisors

Steel used in automobile production
Wood used in furniture production
Charges for the medical tests
Commission pade to sales personnel
Advertising Expenses
( if for the aggregate company budget then fixed)
Salaries of billing clerks

8
9
10
11

Gasoline used for deliver products

Lubricants for machine
Maintenance of production equipment, based on volume produced
Maintenance of production equipment, performed every month

Clasify the following costs as fixed or variable with respect to a unit of production

dget then fixed)

Fixed
Fixed

Fixed

Fixed

s as fixed or variable with respect to a unit of production

Variable
Variable
Variable
Variable
Variable

Fixed or variable (if number of billing clerks can vary in

the short run then variable, if there is one person and salary
pade then it is fixed)
Variable
Variable
Variable

Classification of Fixed and Vriable Costs

Clasify the following

unit of production

Fixed
1
2
3
4
5
6
7
8
9
10

Paper used in newspaper production

Wages of production workers
Salary of the Chief Executive officer

Fixed

Glue used in furniture production

Depreciation of Factory equpment

Fixed

Depreciation of shipping truck

Fixed

Electricity used to operate machine

Boxes used for packing products
Rent for factory building
Factory insurance

lasify the following costs as fixed or variable with respect to a

nit of production

Variable
Variable
Variable
Variable

Variable
Variable
Fixed
Fixed

Classification of Costs: Direct and Indirect

a
b
c
d
e
f
g
h
i
j
k
l

Insurance on manufacturing equipment

Cost of steel plates used in making an automobile body
Wages of assembly workers
Salaries of plant security personnel
Cost of tires
Overtime premiums paid to assembly workers
Depreciation on the factory building
Cost of electric power to operate machine
Production worker's holiday and vacation pay benefits
Wages of materials-handling workers
Cost of seats placed in automobiles
Quality inspection costs

ndirect
Direct

Indirect
Indirect

Direct
Direct

Indirect

Direct
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
Indirect