To classify each cost as variable (V), fixed (F), or mixed (M) cost, we need to determine how the cost behaves in relation to the number of units produced.
a. Factory supervision - Fixed (F) cost as it is not affected by the number of units produced and is a part of overhead (OH).
b. Aluminum tubing - Variable (V) cost as it varies with the number of units produced and is a direct material (DM) cost.
c. Rims - Variable (V) cost as it varies with the number of units produced and is a direct material (DM) cost.
d. Emblem - Fixed (F) cost as it is not affected by the number of units produced and is a direct material (DM) cost.
e. Gearbox - Mixed (M) cost as it may have both fixed and variable components. It can be categorized as overhead (OH).
f. Straight-line depreciation on painting machine - Fixed (F) cost as it is not affected by the number of units produced and is a part of overhead (OH).
g. Fenders - Variable (V) cost as it varies with the number of units produced and is a direct material (DM) cost.
h. Raw material inventory clerk’s wages - Fixed (F) cost as it is not affected by the number of units produced and is a part of overhead (OH).
i. Quality control inspector’s salary - Fixed (F) cost as it is not affected by the number of units produced and is a part of overhead (OH).
j. Handlebars - Variable (V) cost as it varies with the number of units produced and is a direct material (DM) cost.
k. Metal worker’s wages - Variable (V) cost as it varies with the number of units produced and is a direct labor (DL) cost.
l. Roller chain - Variable (V) cost as it varies with the number of units produced and is a direct material (DM) cost.
m. Spokes - Assuming the cost is considered significant, it can be classified as a Mixed (M) cost, as it may have both fixed and variable components. It can be categorized as overhead (OH).
n. Paint - Assuming the cost is considered significant, it can be classified as Variable (V) cost as it varies with the number of units produced and is a direct material (DM) cost.
It's important to note that cost classification may vary depending on the specific circumstances and cost behavior patterns observed in each manufacturing context.