The Management Process and Operating Costs(i) Indicate whether each of the following activ

The Management Process and Operating Costs

(i) Indicate whether each of the following activities takes place during the planning (PL), performing (PE), evaluating (E), or communicating (C) stage of the management process.

1. Changing regular price to clearance price

2. Reporting results to appropriate personnel

3. Preparing budgets of operating costs

4. Comparing estimated and actual costs to determine variances

(ii) Cost Classifications

Indicate whether each of the following costs for a bicycle manufacturer is a product or a period cost, a variable or a fixed cost, a value-adding or a no value-adding cost, and, if it is a product cost, a direct or an indirect cost of the bicycle. 

Cost Classification  

Product or

Variable or

Value-adding or

Direct or

Example

Period

Fixed

No value-adding

Indirect

Bicycle tire

Product

Variable

Value-adding

Direct

1. Depreciation on office computer.

2. Labor to assemble bicycle.

3. Labor to inspect bicycle.

4. Internal auditor’s salary.

5. Lubricant for wheels.

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