Monthly production costs in Pesavento Company for two levels
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1. Monthly production costs in Pesavento Company for two levels of production are as follows.
Cost 2,000 Units 4,000 Units
Indirect Labor $10,000 $20,000
Supervisory Salaries 5,000 5,000
Maintenance 4,000 7,000
Please indicate which costs are variable, fixed, and mixed, and why.
2. For Lodes Company, the relevant range of production is 40-80% of capacity. At 40% of capacity, a variable cost is $4,000 and a fixed cost is $6,000. Please diagram the behavior of each cost within the relevant range assuming the behavior is linear.
3. For Hunt Company, a mixed cost is $15,000 plus $18 per direct labor hour. Please Diagram the behavior of the cost using increments of 500 hours up to 2,500 hours on the horizontal axis and increments of $15,000 up to $60,000 on the vertical axis.
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Solution Summary
1. Monthly production costs in Pesavento Company for two levels of production are as follows.
Cost 2,000 Units 4,000 Units
Indirect Labor $10,000 $20,000
Supervisory Salaries 5,000 5,000
Maintenance 4,000 7,000
Please indicate which costs are variable, fixed, and mixed, and why.
2. For Lodes Company, the relevant range of production is 40-80% of capacity. At 40% of capacity, a variable cost is $4,000 and a fixed cost is $6,000. Please diagram the behavior of each cost within the relevant range assuming the behavior is linear.
3. For Hunt Company, a mixed cost is $15,000 plus $18 per direct labor hour. Please Diagram the behavior of the cost using increments of 500 hours up to 2,500 hours on the horizontal axis and increments of $15,000 up to $60,000 on the vertical axis.
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1. Monthly production costs in Pesavento Company for two levels of production are as follows.
Cost 2,000 Units 4,000 Units
Indirect Labor $10,000 $20,000
Supervisory Salaries ...
Purchase this Solution
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