Cost Classification Assignment 1 Her first action plan was t

Cost Classification (Assignment #1) Her first action plan was to list all the key products or items that she would need to start the business. Keisha\'s list included a conventional oven, a cash register, baking pans, busines:s licenses, health inspections, flour, sugar, baking soda, raisins, butter, eggs, and rum. She also planned on hiring her accounting professor on a part time basis to perform bookkeeping services and her nieces Brianna and Alexis, to help her in the bakery. Aunt Sue Ellen would supervise the girls so that Keisha could focus on developing her business. K&J;\'s cost drivers are provided in Table 1. Required: Keisha needs your help in classifying the various costs. In order to manage these costs,she wants them identified using the information below. She asked that you use Table 2 for your answers. a. Behavior (fixed or variable) b. Traceability (direct or indirect) c. Financial reporting (product or period) d. If product cost, identify which items are direct materials, direct labor, or manufacturing overhead.

Solution

Cost Classification Chart

Costs

Behavior

Tractability

Financial Reporting

DM,DL,MOH

Oven

Fixed

Indirect

Period

MOH

Cash Register

Baking Pans

Fixed

Indirect

Product

MOH

Business License

Fixed

Indirect

Period

Health Inspections

Variable

Indirect

Period

Rent

Fixed

Indirect

Period

Utilities

Fixed

Indirect

Period

Mobile Phone

Fixed

Indirect

Period

Flour

Variable

Direct

Product

DM

Baking Soda

Variable

Direct

Product

DM

Butter

Variable

Direct

Product

DM

Raisins

Variable

Direct

Product

DM

Eggs

Variable

Direct

Product

DM

Rum

Variable

Direct

Product

DM

Other

Variable

Direct

Product

DM

Accountant

Fixed

Indirect

Period

Brianna

Variable

Direct

Product

DL

Alexis

Variable

Direct

Product

DL

Keisha

Fixed

Indirect

Period

DL

Aunt

Fixed

Indirect

Period

Cost Classification Chart
Costs	Behavior	Tractability	Financial Reporting	DM,DL,MOH
Oven	Fixed	Indirect	Period	MOH
Cash Register
Baking Pans	Fixed	Indirect	Product	MOH
Business License	Fixed	Indirect	Period
Health Inspections	Variable	Indirect	Period
Rent	Fixed	Indirect	Period
Utilities	Fixed	Indirect	Period
Mobile Phone	Fixed	Indirect	Period
Flour	Variable	Direct	Product	DM
Baking Soda	Variable	Direct	Product	DM
Butter	Variable	Direct	Product	DM
Raisins	Variable	Direct	Product	DM
Eggs	Variable	Direct	Product	DM
Rum	Variable	Direct	Product	DM
Other	Variable	Direct	Product	DM
Accountant	Fixed	Indirect	Period
Brianna	Variable	Direct	Product	DL
Alexis	Variable	Direct	Product	DL
Keisha	Fixed	Indirect	Period	DL
Aunt	Fixed	Indirect	Period