Costs and Profit Assignment
Assignment 2
(20 points)
Assignment 2: Costs and Profit
Instructions
Save this file in your course folder, and name it with Assignment, the section number, and your first initial and last name. For example, Jessie Robinson's assignment for Section 1 would be named Assignment1JRobinson.
Type the answers to the assignment questions below. Use complete sentences unless the question says otherwise. You will have more than one day to complete an assignment. At the end of each day, be sure to save your progress.
Review Lesson 4 of the Course Overview for instructions about turning in your assignments.
Assignment Questions
In Section 2, you learned about costs and profit. Now, you'll apply what you learned.
1. Choose a real or made up example of a company, and describe at least three variable costs the company has. (1-3 sentences. 1.5 points)
Direct materials. The most purely variable cost of all, these are the raw materials that go into a product.
Piece rate labor. This is the amount paid to workers for every unit completed (note: direct labor is frequently not a variable cost, since a minimum number of people are needed to staff the production area; this makes it a fixed cost).
Production supplies. Things like machinery oil are consumed based on the amount of machinery usage, so these costs vary with production volume.
Billable staff wages. If a company bills out the time of its employees, and those employees are only paid if they work billable hours, then this is a variable cost. However, if they are paid salaries (where they are paid no matter how many hours they work), then this is a fixed cost.
Commissions. Salespeople are paid a commission only if they sell products or services, so this is clearly a variable cost.
Credit card fees. Fees are only charged to a business if it accepts credit card purchases from customers. Only the credit card fees that are a percentage of sales (i.e., not the monthly fixed fee) should be considered variable.
Freight out. A
(20 points)
Assignment 2: Costs and Profit
Instructions
Save this file in your course folder, and name it with Assignment, the section number, and your first initial and last name. For example, Jessie Robinson's assignment for Section 1 would be named Assignment1JRobinson.
Type the answers to the assignment questions below. Use complete sentences unless the question says otherwise. You will have more than one day to complete an assignment. At the end of each day, be sure to save your progress.
Review Lesson 4 of the Course Overview for instructions about turning in your assignments.
Assignment Questions
In Section 2, you learned about costs and profit. Now, you'll apply what you learned.
1. Choose a real or made up example of a company, and describe at least three variable costs the company has. (1-3 sentences. 1.5 points)
Direct materials. The most purely variable cost of all, these are the raw materials that go into a product.
Piece rate labor. This is the amount paid to workers for every unit completed (note: direct labor is frequently not a variable cost, since a minimum number of people are needed to staff the production area; this makes it a fixed cost).
Production supplies. Things like machinery oil are consumed based on the amount of machinery usage, so these costs vary with production volume.
Billable staff wages. If a company bills out the time of its employees, and those employees are only paid if they work billable hours, then this is a variable cost. However, if they are paid salaries (where they are paid no matter how many hours they work), then this is a fixed cost.
Commissions. Salespeople are paid a commission only if they sell products or services, so this is clearly a variable cost.
Credit card fees. Fees are only charged to a business if it accepts credit card purchases from customers. Only the credit card fees that are a percentage of sales (i.e., not the monthly fixed fee) should be considered variable.
Freight out. A