Blackstock Company Manufactures Digital Cameras

question 100

Essay

Blackstock Company manufactures digital cameras. Indicate whether the cost is a product cost or period cost AND whether its cost behavior is fixed, variable, or mixed by placing X's in the appropriate boxes. As an example, commissions paid to sales staff would be classified as a period cost and variable. $$\begin{array} { | l | l | l | l | } \hline & { \text { Cost Behavior } } \\\hline \text { Cost } & \text { Fixed } & \text { V ariable } & \text { Mixed } \\\hline \text { Insur ance on executive offices } & & & \\\hline \text { Lens caps for digital cameras } & & & \\\hline \text { Depreciation on manuf acturing equipment } & & & \\\hline \text { Shipping cost to defiver products to customers } & & & \\\hline \text { Salary of compary president } & & & \\\hline \text { Wages of assembly workers } & & & \\\hline \text { Product advertising } & & & \\\hline \begin{array} { l } \text { Utilities: electricity to nun machines and for } \\\text { heat and lights in factory }\end{array} & & & \\\hline\end{array}$$

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Definitions:

Cost Pool

A grouping of individual costs typically by department or service, from which cost allocations are made to products or services.

Cost Allocation

The process of assigning indirect costs to different departments, projects, or production processes within a company to ensure accurate product costing or project budgeting.

Reciprocal Services Method

An accounting method used to allocate costs in situations where support departments provide services to each other as well as to production departments.

Support Department Costs

Expenses associated with departments that do not directly generate revenue but provide essential services to other departments, like IT and HR.