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2-19 Basic Concepts

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For each of the following costs incurred in a manufacturing firm, indicate whether the costs are
most likely fixed (F) or variable (V) and whether they are most likely period costs (P) or product
costs (M) under full absorption costing.

a. Energy to run machines producing units of output in the factory.
b. Depreciation on the building for administrative staff offices.
c. Bonuses of top executives in the company.
d. Overtime pay for assembly workers.
e. Transportation-in costs on materials purchased.
f. Assembly line workers’ wages.
g. Sales commissions for sales personnel.
h. Administrative support for sales supervisors.
i. Controller’s office rental.
j. Cafeteria costs for the factory.

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