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Sandburg Manufacturing manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for the production of 2000 units. The Utilities and Maintenance are mixed costs. The fixed portions of these costs are $300 and $200 respectively. Costs Incurred Production in Units 2,0004,000 Production Costs a. Direct Materials $6,000? b. Direct Labor 16,000? c. Utilities 1,000? d. Rent 3,000? e. Indirect Labor 4,200? f. Supervisory Salaries 1,500? g. Maintenance 1,000? h. Depreciation 2,500?\begin{array} { l r r } & { \text { Costs Incurred } } \\ \text { Production in Units } & 2,000 & 4,000 \\ \text { Production Costs } & & \\\hline \text { a. Direct Materials } & \$ 6,000 & ? \\\text { b. Direct Labor } & 16,000 & ? \\\text { c. Utilities } & 1,000 & ? \\\text { d. Rent } & 3,000 & ? \\\text { e. Indirect Labor } & 4,200 & ? \\\text { f. Supervisory Salaries } & 1,500 & ? \\\text { g. Maintenance } & 1,000 & ? \\\text { h. Depreciation } & 2,500 & ?\end{array} Production in Units Production Costs a. Direct Materials b. Direct Labor c. Utilities d. Rent e. Indirect Labor f. Supervisory Salaries g. Maintenance h. Depreciation Costs Incurred 2,000$6,00016,0001,0003,0004,2001,5001,0002,5004,000???????? Instructions
Calculate the expected costs to be incurred when production is 4000 units. Use your knowledge of cost behavior to determine which of the other costs are fixed or variable.
On May 20, 2024
\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad Costs Incurred \text { Costs Incurred } Costs Incurred
Production in Units ‾2,000‾4,000‾Production Costs‾ a. Direct Materials $6,000$12,000 b. Direct Labor 16,00032,000 c. Utilities 1,0001,700 d. Rent 3,0003,000 e. Indirect Labor 4,2008,400 f. Supervisory Salaries 1,5001,500 g. Maintenance 1,0001,800 h. Depreciation 2,5002,500\begin{array}{lrr} \underline{\text {Production in Units }}& \underline{2,000}& \underline{4,000}\\ \underline{\text {Production Costs}}\\ \text { a. Direct Materials } & \$ 6,000 & \$ 12,000 \\\text { b. Direct Labor } & 16,000 & 32,000 \\\text { c. Utilities } & 1,000 & 1,700 \\\text { d. Rent } & 3,000 & 3,000 \\\text { e. Indirect Labor } & 4,200 & 8,400 \\\text { f. Supervisory Salaries } & 1,500 & 1,500 \\\text { g. Maintenance } & 1,000 & 1,800 \\\text { h. Depreciation } & 2,500 & 2,500\end{array}Production in Units Production Costs a. Direct Materials b. Direct Labor c. Utilities d. Rent e. Indirect Labor f. Supervisory Salaries g. Maintenance h. Depreciation 2,000$6,00016,0001,0003,0004,2001,5001,0002,5004,000$12,00032,0001,7003,0008,4001,5001,8002,500
a. Variable $6,000÷2,000=$3.00 \$ 6,000 \div 2,000=\$ 3.00 $6,000÷2,000=$3.00 per unit; 4,000×$3.00=$12,000 4,000 \times \$ 3.00=\$ 12,000 4,000×$3.00=$12,000
b. Variable $16,000÷2,000=$8.00 \$ 16,000 \div 2,000=\$ 8.00 $16,000÷2,000=$8.00 per unit; 4,000×$8.00=$32,000 4,000 \times \$ 8.00=\$ 32,000 4,000×$8.00=$32,000
c. Mixed $1,000−$300=$700;$700÷2,000=$35 \$ 1,000-\$ 300=\$ 700 ; \$ 700 \div 2,000=\$ 35 $1,000−$300=$700;$700÷2,000=$35 per unit of variable costs; 4,000×$.35=$1,400+$300 4,000 \times \$ .35=\$ 1,400+\$ 300 4,000×$.35=$1,400+$300 (fixed) =$1,700 =\$ 1,700 =$1,700
d. Fixed $3,000 \$ 3,000 $3,000
e. \quad ariable $4,200÷2,000=$2.10 \$ 4,200 \div 2,000=\$ 2.10 $4,200÷2,000=$2.10 per unit; 4,000×$2.10=$8,400 4,000 \times \$ 2.10=\$ 8,400 4,000×$2.10=$8,400
f. Fixed $1,500 \$ 1,500 $1,500
g. Mixed $1,000−$200=$800 \$ 1,000-\$ 200=\$ 800 $1,000−$200=$800 variable portion; $800÷2,000=$,40 \$ 800 \div 2,000=\$, 40 $800÷2,000=$,40
4,000×$,40=$1,600+$200 4,000 \times \$, 40=\$ 1,600+\$ 200 4,000×$,40=$1,600+$200 (fixed portion) =$1,800 =\$ 1,800 =$1,800
h. Fixed $2.500 \$ 2.500 $2.500