The matchup is given below:
Cost Description FC/VC DM/IM/DL/IL/DE/IE
Paper used for book pages. VC DM
Rent for the printing press facility. FC IE
Salaries of the printing press operators. VC DL
Radio ad expenses for promoting the books. VC DE
Salary of the graphic designer. FC IL
Ink used in the printing process. VC DM
Property taxes for the printing press facility. FC IE
Electricity used in the printing process. VC IE
Depreciation of printing equipment. FC IE
Commission paid to book sales reps. VC DE
Fixed costs (FC) are known to be costs that remain the same in total regardless of the number of units of output produced. They are said to be incurred for the basic infrastructure or resources needed to operate the business.
Note that variable costs (VC) are also said to be costs that change in total in direct proportion to the number of units of output produced. These costs are directly associated with the production process and vary with the volume of output.
CXC/CAPE MOB U2M1-Production & Operations Management
Workbook
Activity 110: Classifying Production Costs
For each cost description, identify whether it is a Fixed Cost (FC) or Variable Cost (VC), AND also classify it as Direct Materials (DM), Indirect Materials (IM), Direct Labour (DL), Indirect Labour (IL), Direct Expense (DE), or Indirect Expense (IE) related to the production of books.
Cost Description
1 Paper used for book pages.
FC/VC
DM/IM/DL/
IL/DE/IE
2
Rent for the printing press facility.
3 Salaries of the printing press operators.
4 Radio ad expenses for promoting the books.
5 Salary of the graphic designer.
6 Ink used in the printing process.
7 Property taxes for the printing press facility.
8 Electricity used in the printing process.
9 Depreciation of printing equipment.
10 Commission paid to book sales reps.