E5.6 (LO 1), AP PCB Corporation manufactures a single product. Monthly production costs incurred in the manufacturing pre shown below for the production of 3,000 units. Direct materials. Direct labor Utilities Property taxes Indirect labor $7,500 18,000 2,100 1,000 4,500 1,900 1,100 2,400 The utilities and maintenance costs are mixed costs. The fixed components of these costs are $300 and $200, respectively. Instructions Supervisory salaries Maintenance Depreciation (straight-line) a. Identify the above costs as variable, fixed, or mixed. b. Calculate the expected costs when production is 5,000 units.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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E5.6 (LO 1), AP PCB Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are
shown below for the production of 3,000 units.
Direct materials
Direct labor
Utilities
Property taxes
Indirect labor
2,100
1,000
4,500
1,900
1,100
2,400
The utilities and maintenance costs are mixed costs. The fixed components of these costs are $300 and $200, respectively.
Instructions
Supervisory salaries
Maintenance
Depreciation (straight-line)
$7,500
18,000
a. Identify the above costs as variable, fixed, or mixed.
b. Calculate the expected costs when production is 5,000 units.
Explain assumptions underlying CVP analysis.
Transcribed Image Text:E5.6 (LO 1), AP PCB Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,000 units. Direct materials Direct labor Utilities Property taxes Indirect labor 2,100 1,000 4,500 1,900 1,100 2,400 The utilities and maintenance costs are mixed costs. The fixed components of these costs are $300 and $200, respectively. Instructions Supervisory salaries Maintenance Depreciation (straight-line) $7,500 18,000 a. Identify the above costs as variable, fixed, or mixed. b. Calculate the expected costs when production is 5,000 units. Explain assumptions underlying CVP analysis.
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Cost accounting refers to the cost that is incurred in the business and various ways are to be followed to reduce the cost wherever possible by the management.

 

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