Exercise 18-6 (Part Lovel Submission) P Corporation manufactures a sin e roduct.

Question

Exercise 18-6 (Part Lovel Submission) P Corporation manufactures a sin e roduct. Monthly production co s ncu 1 the manufacturing process re shown below or the production o 3 79 units T e utilities and maintenance costs are mixed costs ne fixed portions o hese costs are S388 and $299 respectively Production Costs Diroct matcrials Direct labxr $9,697 2,715 Property taxes Indirect labor Supcrvisory salaries 1422 Identify the above costs as variable, fixed, or mixed. Direct materials Direct labor Property taxes Supervisory salaries (b1) Calculate variable costs per unit, variable cost per unit for utilities and variable cost per unit for maintenance. Exclude mixed costs in the caleulacion for variable cost per uit. (Round answers to 2 decimal places e.g. 2.25.) Variable cost per unit (Exclude variable cost for utilitics and maintcnancc) Variable cost per unit for utilities Variable cost per unit for maintenance Calculate dhe expected casts when pruductioo is 6,465 units. Cost to produce 6465 units

Explanation / Answer

Answer a. Cost Type Direct Materials Variable Direct Labor Variable Utilities Mixed Property Taxes Fixed Indirect Labor Variable Supervisory Salaries Fixed Maintenance Mixed Depreciation Fixed Answer b1. Variable Cost Total - 3,879 Units Cost per Unit Direct Materials           9,697.00              2.50 Direct Labor         23,274.00              6.00 Indirect Labor           5,818.00              1.50 Total         38,789.00            10.00 Mixed Cost Total Fixed Portion Variable Portion Total Per Unit Utilities           2,715.00         388.00    2,327.00           0.60 Maintenance Cost           1,422.00         259.00    1,163.00           0.30 Total           4,137.00         647.00    3,490.00           0.90 Answer b2. Calculation of Expected Cost - 6,465 Units Amount Variable Costs Direct Materials         16,161.67 Direct Labor         38,790.00 Indirect Labor           9,696.67 64,648.33 Mixed Costs Utilities           4,266.33 Maintenance Cost           2,197.33      6,463.67 Fixed Costs Property Taxes           1,293.00 Supervisory Salaries           2,457.00 Depreciation           3,103.00      6,853.00 Total Cost 77,965.00

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