PCB Corporation manufactures a single product. Monthly production costs incurred
ID: 2427685 • Letter: P
Question
PCB Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 4,200 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $420 and $280, respectively.
Production Costs
3,360
A.) Identify the above costs as variable, fixed, or mixed.
B.) Calculate variable costs per unit, variable cost per unit for utilities and variable cost per unit for maintenance.
C.) Calculate the expected costs when production is 7,000 units.
Production in Units 4,200Production Costs
Direct materials $10,500 Direct labor 21,000 Utilities 2,520 Property taxes 1,400 Indirect labor 6,300 Supervisory salaries 2,520 Maintenance 1,540 Depreciation3,360
Explanation / Answer
A) Direct Material Variable Cost Direct Labour Variable cost Utilities Variable Property Taxes Fixed Indirect labour Variable Supervisory Salaries Mixed Maintenance Variable Depreciation Fixed 4200 Units Per Unit(Total/4200) B) Direct Material 10500 2.5 Direct Labour 21000 5 Utilities 2520 0.6 Maintenance 1540 0.366667 Total 35560 35560/4200 8.466667 7000 units Direct Material 17500 2.5*70000 Direct Labour 35000 5*7000 Utilities 4200 .6*7000 Property Taxes 1400 Indirect labour 6300 Supervisory Salaries 2520 Maintenance 2569 7000*.367 Depreciation 3360 Total 72849
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