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ACT 202 Assignment # 1

North South Industries is a renowned car manufacturer. They make three dierent
!ines of cars" Sedan# S$% and &u'ury S(orts. )e!ow is a !ist of cost that they incur in
their factory and administration. Identify the ty(e of each of those costs. *hether
they are Fixed or Variable; Product or Period; if product then whether they
are Direct Material, Direct Labor or Overhead; If period then whether they
are Adini!trative or "ellin#; "un$ co!t or Opportunity co!t%
1. The tires that go into the sedan each cost )+T 2000.
2. To (aint each door of the &$,$-. S(orts mode!# it takes )+T /000.
0. 1!ectricity 2i!! in factory is at !east )+T /000. If it crosses that then (er 3ega
*att is an additiona! )+T 2000.
4. 5actory su(er6isor7s sa!ary is )+T 10#000 (er month.
/. *ages and sa!aries of the de(artment that hand!es customer 2i!!ings is )+T
80#000 (er month.
9. -ent of the cor(orate head:uarter is )+T /00#000.
;. North South 2ought a custom machine for the factory for )+T 10#000. )ut
situation changed and now the 3achine can 2e so!d for 12#000.
<. =ea!th insurance (remiums for factory workers are )+T /0#000 (er month.
8. The cost of the so!der to make e!ectrica! !ine >oints in the S$% is )+T 2/ (er
10.Instead of using the factory warehouse if North South rented it# they wou!d
ha6e made a rent of )+T /00#000 (er month. =owe6er# 2y using it# they
estimate they get a 2ene?t of )+T <00#000 (er month.
&OOD L'()