PROBLEM Il: (10 POINTS) The following is a list of various costs of producing T-

Question

PROBLEM Il: (10 POINTS) The following is a list of various costs of producing T-shirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold. Ink used for screen printing (a) (b) Warehouse rent of $8,000 per month plus $0.50 per square foot of storage (c) (d) used Thread Electricity costs of $0.038 per kilowatt-hour Janitorial costs of $4,000 per month (e) (0 Color dyes for producing different colors of T-shirts (g) Straight-line depreciation on sewing machines Hourly wages of sewing machine operators (0 Property taxes on factory, building, and equipment 0 Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001 for each machine hour of use.)

Explanation / Answer

a Ink used for screen printing Variable b Warehouse rent of $8,000 per month plus $.50 per square foot of storage used Mixed c Thread. Variable d Electricity costs of $.038 per kilowatt-hour. Variable e Janitorial costs of $4,000 per month. fixed f Color dyes for producing different colors of sweatshirts. Variable g Straight-line depreciation on sewing machines. fixed h Hourly wages of sewing machine operators. Variable i Property taxes on factory, building, and equipment. fixed j Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001for each machine hour of use.) Mixed

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