a)Classify each cost element as either fixed, variable, or mixedb)Calculate:i) the variable production cost per unit and the total fixed production overhead.ii) The total variable cost per unit and the total fixed costsHint: Use the high-low method to separate mixed costs into their fixed and variable components. Buggs-Off Corporation produces and sells a line of mosquito repellants that are sold usually all year round.The product sells at $100 per box. The following cost data has been prepared for its estimated upper and lowerlimits of activity for the year ended December 31, 2020.Lower Limit Upper LimitProduction (# of boxes)Production Costs:4,0006,000Direct Materials.$60,000$90,000Direct Labour80,000120,000Overhead:Indirect Materials..25,00037,500Indirect Labour40,00050,000Depreciation20,00020,000Selling & Administrative Expenses:Sales Salaries .Office Salaries50,00065,00030,00030,000Advertising45,00045,000Other15,00020.000Total$365.000$477.500

Workings Particulars Lower limit Upper limit Using High-low method Variable Fixed…

a) Classify each cost element as either fixed, variable, or mixed b) Calculate: i) the variable production cost per unit and the total fixed production overhead. ii) The total variable cost per unit and the total fixed costs Hint: Use the high-low method to separate mixed costs into their fixed and variable components.

a) Classify each cost element as either fixed, variable, or mixed b) Calculate: i) the variable production cost per unit and the total fixed production overhead. ii) The total variable cost per unit and the total fixed costs Hint: Use the high-low method to separate mixed costs into their fixed and variable components.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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