Question

Kater Company manufactures shelving units. The company receives pre-cut wood, drills holes in the wood so that movable shelves may be installed, then assembles and paint the units. Classify each of the following items of factory overhead as either fixed or variable cost.

a. Supervisor of the Drilling Department
b. Oil used to lubricate drill press machines
c. Propane for forklift trucks used to move the material from the Drilling Department to the Assembly Department
d. Natural gas used to heat the plant
e. Security guard
f. Insurance on factory building
g. Electricity to power drill press machines
h. Rent of factory building

Answer 1

Answer: Please see below for answers.

Step-by-step explanation:

Variable costs are referred to as costs incurred to a company which change as the volume of production by the company or business changes that is when the volume of production increases, the costs increases , and decreases with decreased production.

Fixed costs are expenses incurred to a company which do not change in relation to the volume of production by the company or business that is when the volume of production increases or decreases, the costs remains the same.

a. Supervisor of the Drilling Department----- Fixed cost

b.Oil used to lubricate drill press machines---- Variable cost

c.Propane for forklift trucks used to move the material from the Drilling Department to the Assembly Department---- Variable cost

e.Natural gas used to heat the plant----- Variable cost

f.Security guard---- fixed cost s

g.Insurance on factory building----- Fixed costs

h.Electricity to power drill press machines---- Variable costs

.i Rent of factory building-Fixed costs