Identify each cost as being variable, fixed, or mixed by writing the name of each cost under one of the following headings: Variable Costs, Fixed Costs, Mixed Costs Develop an equation for total monthly production costs. Predict total costs for a monthly production volume of 10,000 units.
ABC, Inc. has the following information available regarding costs at various levels of monthly production:
Production volume 8,000 12,000
Direct materials $75,000 $70,000
Direct labor 56,000 80,000
Packaging materials 22,000 30,000
Supervisors' salaries 14,000 14,000
Maintenance 31,000 45,000
Utilities 15,000 21,000
Insurance on plant and equipment 2,600 2,600
Property taxes on plant and equipment 2,000 2,000
Total $228,600 $275,600
Required:
- Identify each cost as being variable, fixed, or mixed by writing the name of each cost under one of the following headings: Variable Costs, Fixed Costs, Mixed Costs
- Develop an equation for total monthly production costs.
- Predict total costs for a monthly production volume of 10,000 units.
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