Chillicothe Meat Company produces one of the best sausage products in southern Ohio. The company’s controller used the account-classification method to compile the following information.
a. Depreciation schedules revealed that monthly depreciation on buildings and equipment is $19.000.
b. Inspection of several invoices from meatpackers indicated that meat costs the company $1.10 per pound of sausage produced.
c. Wage records showed that compensation for production employees costs $.70 per pound of sausage produced.
d. Payroll records showed that supervisory salaries total $10,000 per month.
e. Utility bills revealed that the company incurs utility costs of $4.000 per month plus $.20 per pound of sausage produced.
Required:
1. Classify each cost item as variable, fixed, or semivariable.
2. Write a cost formula to express the cost behavior of the firm’s production costs. (Use the formula Y= a+ bX, where Y denotes production cost and X denotes quantity of sausage produced.)
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.