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    variable, fixed, mixed costs

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    Fowler Company manufactures a single product. Annual production costs incurred
    in the manufacturing process are shown below for two levels of production.


    Costs Incurred
    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.

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    Solution Preview


    Variable cost: Variable cost is a cost that changes in proportion with change in the volume of quantity ...

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    This solution is comprised of answers related with variable, fixed, mixed costs.