1. The following is a list of various costs of producing T-shirts. Classify each
ID: 2425654 • Letter: 1
Question
1. The following is a list of various costs of producing T-shirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.
(a)
Leather used to make a handbag.
(b)
Warehouse rent of $8,000 per month plus $.50 per square foot of storage used.
(c)
Thread.
(d)
Electricity costs of $.038 per kilowatt-hour.
(e)
Janitorial costs of $4,000 per month.
(f)
Advertising costs of $12,000 per month.
(g)
Accounting salaries.
(h)
Color dyes for producing different colors of sweatshirts.
(i)
Salary of the production supervisor.
(j)
Straight-line depreciation on sewing machines.
(k)
Patterns for different designs. Patterns typically last many years before being replaced.
(l)
Hourly wages of sewing machine operators.
(m)
Property taxes on factory, building, and equipment.
(n)
Cotton and polyester cloth.
(o)
Maintenance costs with sewing machine company. The cost is $2,000 per year plus $.001 for each machine hour of use.
2. Copper Hills manufactures laser printers within a relevant range of production of 70,000 to 100,000 printers per year. The following partially completed manufacturing cost schedule has been prepared:
Number of Printers Produced
70,000
90,000
100,000
Total costs:
Total variable costs
$350,000
(d)
(j)
Total fixed costs
630,000
(e)
(k)
Total costs
$980,000
(f)
(l)
Cost per unit:
Variable cost per unit
(a)
(g)
(m)
Fixed cost per unit
(b)
(h)
(n)
Total cost per unit
(c)
(i)
(o)
Complete the preceding cost schedule, identifying each cost by the appropriate letter (a) through (o).
3. For the current year ending April 30, Haley Company expects fixed costs of $60,000, a unit variable cost of $70, and anticipated break-even of 1,715 sales units.
(a)
Compute the unit sales price.
(b)
Compute the sales (units) required to realize an operating profit of $8,000.
Round your answer to the nearest whole number.
4. Currently, the unit selling price is $50, the variable cost, $34, and the total fixed costs, $108,000. A proposal is being evaluated to increase the selling price to $54.
(a)
Compute the current break-even sales (units).
(b)
Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.
5. For the coming year, Reve Company estimates fixed costs at $109,000, the unit variable cost at $21, and the unit selling price at $85. Determine (a) the break-even point in units of sales, (b) the unit sales required to realize operating income of $150,000 and (c) the probable operating income if sales total $500,000.
Round units to the nearest whole number and percentage to one decimal place.
(a)
Leather used to make a handbag.
(b)
Warehouse rent of $8,000 per month plus $.50 per square foot of storage used.
(c)
Thread.
(d)
Electricity costs of $.038 per kilowatt-hour.
(e)
Janitorial costs of $4,000 per month.
(f)
Advertising costs of $12,000 per month.
(g)
Accounting salaries.
(h)
Color dyes for producing different colors of sweatshirts.
(i)
Salary of the production supervisor.
(j)
Straight-line depreciation on sewing machines.
(k)
Patterns for different designs. Patterns typically last many years before being replaced.
(l)
Hourly wages of sewing machine operators.
(m)
Property taxes on factory, building, and equipment.
(n)
Cotton and polyester cloth.
(o)
Maintenance costs with sewing machine company. The cost is $2,000 per year plus $.001 for each machine hour of use.
Explanation / Answer
Dear Student, only one question is allowed at a time.
1)
Sl. No Particulars Nature Remarks a) Leather used to make a handbag Variable As the quantity required will depend on number of handbags made. b) Warehouse rent of $8,000 per month plus $.50 per square foot of storage used. Mixed $ 8,000 is fixed and remaining is variable depending upon are used. c) Thread Variable As the quantity required will depend on number of T-shirts made. d) Electricity costs of $.038 per kilowatt-hour. Variable As it will depend upon usage. e) Janitorial costs of $4,000 per month. Fixed As it will not change with production. f) Advertising costs of $12,000 per month. Fixed As it will not change with production. g) Accounting salaries. Fixed As it will not change with production. h) Color dyes for producing different colors of sweatshirts. Variable As the quantity required will depend on number of T-shirts made. i) Salary of the production supervisor. Fixed As it will not change with production. j) Straight-line depreciation on sewing machines. Fixed As it will not change with production. k) Patterns for different designs. Patterns typically last many years before being replaced. Fixed As it will not change with production. l) Hourly wages of sewing machine operators. Variable As the quantity required will depend on number of T-shirts made. m) Property taxes on factory, building, and equipment. Fixed As it will not change with production. n) Cotton and polyester cloth. Variable As the quantity required will depend on number of T-shirts made. o) Maintenance costs with sewing machine company. The cost is $2,000 per year plus $.001 for each machine hour of use. Mixed $ 2,000 is fixed and remaining is variable depending upon are used.Related Questions
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