EXERCISE #1-classifies costs The following is a list of various costs of product

Question

EXERCISE #1-classifies costs The following is a list of various costs of production of t-shirts, Classify each cost as a joint fixed or variable cost for units produced and sold Variable Fijos Mixtos I Ink used for screen printing 2 Rental of warchouse of $8,000 per month more 50 50 per square foot of used storage 3. thread 4 50 038 per kilowatt-hour electricity costs 5. Costs of cleaning of S4,000 per moeth 6. Advertising costs of $12,000 per month 7. Wases 8 Dye color toproduce different-colors oft-shirts Production supervisor salary 10 Linear depreciation in sewing machines I1 Salaries of internal pattern designers 12. Hourly wages of sewing machine operators 13 Taxes on the property of factory, construction and equipment 14 Cotton and polyester fabric 15. Maintenance costs with the sewing machine company (cost is r year over 50001 for each hour of use of the machine) EXERCISE W2-Break- Even Point Given the following information Variable cost as a percentage of sales-75% Unit variable cost $ 50 Fixed costs $ 400,000 INSTRUCTIONS Determine what is the break even point in units?

Explanation / Answer

Maintenance costs with sweing machine company(the cost is $2000 per year plus $.001 for each machine hour of use)

Exercise 42

Variable cost as % of sales =75%

Therefore contribution as % of sales =25%

contribution /unit =$50*25%=12.5

Fixed Cost =$400000

Break Even Point in units =$400000/12.5

=32000 units

Ink Used for screen printing Variable Warehouse rent of $8000 per month plus $.50 per square foot of storage used Mixed Thread Variable Electricity Costs of $.038 oer kilowatt hr Variable Janitorial costs of $4000 p.m Fixed Advertising costs of $12000 pm Fixed Accounting Salaries Fixed Color Dyes for production supervisor Variable Salary of the prodcution supervisor Fixed Straight Line depreciation on sewing machines Fixed Salaries of internal pattern designers Fixed Hourly wages of sewing machine operators Variable Property taxes on factory ,building and equipment Fixed Cotton and Polyster cloth Variable

Maintenance costs with sweing machine company(the cost is $2000 per year plus $.001 for each machine hour of use)

Exercise 42

Variable cost as % of sales =75%

Therefore contribution as % of sales =25%

contribution /unit =$50*25%=12.5

Fixed Cost =$400000

Break Even Point in units =$400000/12.5

=32000 units

Variable

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