Question

Sandhill Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3.900 units. The utilities and maintenance costs are more costs. The fored portions of these costs are $387 and $258, respectively. 3.900 Production in Units Production Costs Direct materials Direct labor Utilities Property taxes Indirect labor Supervisory salaries Maintenance Depreciation 59.675 27.420 3.702 1.290 5,805 2451 1.233 3.096 Identify the above costs as variable, fixed, or med. Costs Direct materials Direct labor Utilities Property taxes Indirect labor Supervisory salaries Maintenance Depreciation Calculate variable costs per unit, variable cost per unit for utilities and variable cost per unit for maintenance. Exclude mixed costs in the calculation for variable cost per unit. (Round answers to 2 decimal places eg 225 5 Variable cost per unit (Exclude variable cost for utilities and maintenance) Variable cost per unit for utilities Variable cost per unit for maintenance 5 $ Calculate the expected costs when production is 6,450 units. Cost to produce 6,450 units $

Answer 1

Explanation Costs Direct Materials Direct Labor Utilities Property Taxes Indirect Labor Supervisory Salaries Maintenance Depreciation Variable Variable Mixed Fixed Variable Fixed Mixed Fixed sometimes it may be taken as fixed, but as per general view it is variable so we consider it variable b. Variable cost per unit Variable cost per unit for utilities Variable cost per unit for maintenance Amouunt ($) Explanation 11 (9675 + 27420 + 5805 ) / 3900 0.85 (3702 - 387)/3900 0.25 (1233 - 258 ) /3900

c. Cost to produce 6450 units 85527 (12.1 * 6450) + 7482 calculated below 85527 Particulars Amount (S) Explanation Variable Costs per unit 12.1 11 + 0.85 +0.25 calculated above 387 1290 Fixed Costs Utilities Property Taxes Supervisory Salaries Maintenance Depreciation 2451 258 3096 Total Fixed Costs 7482

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