Fowler Company manufactures a single product. Annual production costs incurred
in the manufacturing process are shown below for two levels of production.
Production in Units 5,000 10,000
Total Cost/ Total Cost/
Production Costs Cost Unit Cost Unit
Direct materials $8,250 $1.65 $16,500 $1.65
Direct labor 9,400 1.88 18,800 1.88
Utilities 1,400 0.28 2,300 0.23
Rent 4,000 0.80 4,000 0.40
Maintenance 800 0.16 1,200 0.12
Supervisory salaries 1,000 0.20 1,000 0.10
(a) Define the terms variable costs, fixed costs, and mixed costs.
(b) Classify each cost above as either variable, fixed, or mixed.© BrainMass Inc. brainmass.com October 25, 2018, 12:21 am ad1c9bdddf
Variable cost: Variable cost is a cost that changes in proportion with change in the volume of quantity ...
This solution is comprised of answers related with variable, fixed, mixed costs.
EEC's journal activity
As EEC's corporate business financial analyst, you will need to have a clear understanding of the different types of costs (variable, fixed, and mixed) that the company carries. Review EEC's journal activity. Define and identify its variable, fixed, and mixed costs.
Next, determine what affect a sales volume increase or decrease will have on unit fixed cost, unit variable cost, total fixed cost, and total variable cost.
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