For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold, and then direct cost or an indirect cost with respect to units of product. Manufacturing (Product) Cost
Variable or FixedSelling CostAdministrative CostDirectIndirect
Ex. Direct laborVariable Yes
Executive SalariesFixed Yes
Factory rentFixed Yes
1.Property taxes, factory
2.Boxes used for packaging detergent produced by the company
3.Salespersons' commissions
4.Supervisor's salary factory
5.Depreciation executive autos
6.Wages of workers assembling computers
7.Insurance, finished goods warehouses
8.Lubricants for production equipment
9.Advertising costs
10.Microchips used in producing calculators
11.Shipping costs on merchandise sold
12.Magazine subscriptions, factory lunchroom
13.Thread in a garment factory
14.Executive life insurance
15.Ink used in textbook production
16.Fringe benefits, materials handling workers
17.Yarn used in sweater production
18.Wages of receptionist, executive offices

Diamond motor car company produces some of the most luxurious and expensive cars in the world. typically, only a single dealership is authorized to sell its cars in certain major cities. in less populous areas, diamond authorizes a single dealer for an entire state or region. the manufacturer of diamond automobiles is using a(n) distribution strategy for its product.

Gulliver travel agencies thinks interest rates in europe are low. the firm borrows euros at 5 percent for one year. during this time period the dollar falls 11 percent against the euro. what is the effective interest rate on the loan for one year? (consider the 11 percent fall in the value of the dollar as well as the interest payment.)

In each of the cases below, assume division x has a product that can be sold either to outside customers or to division y of the same company for use in its production process. the managers of the divisions are evaluated based on their divisional profits. case a b division x: capacity in units 200,000 200,000 number of units being sold to outside customers 200,000 160,000 selling price per unit to outside customers $ 90 $ 75 variable costs per unit $ 70 $ 60 fixed costs per unit (based on capacity) $ 13 $ 8 division y: number of units needed for production 40,000 40,000 purchase price per unit now being paid to an outside supplier $ 86 $ 74 required: 1. refer to the data in case a above. assume in this case that $3 per unit in variable selling costs can be avoided on intracompany sales. a. what is the lowest acceptable transfer price from the perspective of the selling division? b. what is the highest acceptable transfer price from the perspective of the buying division? c. what is the range of acceptable transfer prices (if any) between the two divisions? if the managers are free to negotiate and make decisions on their own, will a transfer probably take place?