E5.1 (LO 1), C Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown here for two levels of production. Production in Units Production Costs Direct materials Direct labor Utilities Rent Maintenance Supervisory salaries 5,000 Total Cost $8,000 9.500 2,000 4,000 800 1,000 Instructions a. Define the terms variable costs, fixed costs, and mixed costs. b. Classify each cost above as either variable, fixed, or mixed. Costs Incurred Unit Cost $1.60 1.90 0.40 0.80 0.16 0.20 10,000 Total Cost $16,000 19,000 3,300 4,000 1,400 1,000 Unit Cost $1.60 1.90 0.33 0.40 0.14 0.10
E5.1 (LO 1), C Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown here for two levels of production. Production in Units Production Costs Direct materials Direct labor Utilities Rent Maintenance Supervisory salaries 5,000 Total Cost $8,000 9.500 2,000 4,000 800 1,000 Instructions a. Define the terms variable costs, fixed costs, and mixed costs. b. Classify each cost above as either variable, fixed, or mixed. Costs Incurred Unit Cost $1.60 1.90 0.40 0.80 0.16 0.20 10,000 Total Cost $16,000 19,000 3,300 4,000 1,400 1,000 Unit Cost $1.60 1.90 0.33 0.40 0.14 0.10
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter19: Variable Costing (varcost)
Section: Chapter Questions
Problem 4R: To determine the effect of different levels of production on the company’s income, move to cell B7...
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Question
![E5.1 (LO 1), C Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are
shown here for two levels of production.
Production in Units
Production Costs
Direct materials
Direct labor
Utilities
Rent
Maintenance
Supervisory salaries
5,000
Total
Cost
$8,000
9,500
2,000
4,000
800
1,000
Instructions
a. Define the terms variable costs, fixed costs, and mixed costs.
b. Classify each cost above as either variable, fixed, or mixed.
Diagram cost behavior, determine relevant range, and classify costs.
Costs Incurred
Unit
Cost
$1.60
1.90
0.40
0.80
0.16
0.20
*
10,000
Total
Cost
$16,000
19,000
3,300
4,000
1,400
1,000
Unit
Cost
$1.60
1.90
0.33
0.40
0.14
0.10](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6501bcec-69f0-41c7-aaf6-9d4563ecc7cd%2Fa736b7ae-4517-4f36-a1db-b9c970c06063%2Focc4il_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E5.1 (LO 1), C Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are
shown here for two levels of production.
Production in Units
Production Costs
Direct materials
Direct labor
Utilities
Rent
Maintenance
Supervisory salaries
5,000
Total
Cost
$8,000
9,500
2,000
4,000
800
1,000
Instructions
a. Define the terms variable costs, fixed costs, and mixed costs.
b. Classify each cost above as either variable, fixed, or mixed.
Diagram cost behavior, determine relevant range, and classify costs.
Costs Incurred
Unit
Cost
$1.60
1.90
0.40
0.80
0.16
0.20
*
10,000
Total
Cost
$16,000
19,000
3,300
4,000
1,400
1,000
Unit
Cost
$1.60
1.90
0.33
0.40
0.14
0.10
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