Bonita Company manufactures a single product. Annual production costs incurred i

Question

Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for two levels of production. Costs Incurred Production in Units Production Costs Direct materials Direct labor Utilitles Rent Maintennance Supervisory salaries 5,000 10,000 Total Cost Cost/Unit Total Cost Cost/Unit $8,000 9,500 2,000 4,000 800 1,000 $1.60 1.90 0.40 0.80 0.16 0.20 $16,000 19,000 3,300 4,000 1,400 1,000 $1.60 1.90 0.33 0.40 0.14 0.10 Classify each cost above as either variable, fixed, or mixed Production Costs Direct materials Direct labor Utilities Rent Maintenance Supervisory salaries

Explanation / Answer

Identify cost :

Production cost Direct material Variable Direct labour Variable Utilities Mixed Rent Fixed Maintenance Mixed Supervisory salaries Fixed

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