California Tires manufactures two types of tires, that it sells as wholesale products to various specialty retail auto supply stores. Each tire requires a three-step process. The first step is mixing. The mixing department combines some of the necessary direct materials to create the material mix that will become part of the tire. The second step includes the forming of each tire where the materials are layered to form the tire. This is an entirely automated process. The final step is finishing, which is an entirely manual process. The finishing department includes curing and quality control. Requirement
1. Costs involved in the process are listed next. For each cost, indicate whether it is a direct variable, direct fixed, indirectvariable, or indirect fixed cost, assuming "units of production of each kind of tire" is the cost object. For each cost, indicate whether it is a direct variable (DV), direct fixed (DF), indirect variable (IV) or indirect fixed (IF) cost, assuming "units of production of each kind of bread" is the cost object.(Abbreviation used: Maint. = Maintenance) Cost Type Rubber Reinforcement cables Other direct materials Depreciation on formers Depreciation on mixing machines Rent on factory building Fire insurance on factory building Factory utilities (Cost per minutes of usage) Finishing department hourly laborers Mixing department manager Material handlers in each department (Salaried) Custodian in factory Night guard in factory Machinist (running the mixing machine) (Paid hourly) Machine maint. personnel in each department (Salaried) Maintenance supplies for factory Cleaning supplies for factory
Requirement
2. If the cost object were the "mixing department" rather than units of production of each kind of tire, which preceding costs would now be direct instead of indirect costs: (If a box is not used in the table, leave the box empty; do not select a label.)