Buggs-Off Corporation produces and sells a line of mosquito repellants that are sold usually all year roue The product sells at $100 per box. The following cost data has been prepared for its estimated upper and lowe limits of activity for the year ended December 31, 2020. Lower Limit Upper Limit Production (# of boxes) Production Costs: Direct Materials. Direct Labour Overhead: Indirect Materials.. Indirect Labour Depreciation . Selling & Administrative Expenses: Sales Salaries 4,000 6,000 $90,000 120,000 $60,000 80,000 25,000 37,500 40,000 50,000 20,000 20,000 50,000 65,000 Office Salaries 30,000 30,000 Advertising 45,000 45,000 Other 15.000 20.000 Total $365.000 $477,500
Buggs-Off Corporation produces and sells a line of mosquito repellants that are sold usually all year roue The product sells at $100 per box. The following cost data has been prepared for its estimated upper and lowe limits of activity for the year ended December 31, 2020. Lower Limit Upper Limit Production (# of boxes) Production Costs: Direct Materials. Direct Labour Overhead: Indirect Materials.. Indirect Labour Depreciation . Selling & Administrative Expenses: Sales Salaries 4,000 6,000 $90,000 120,000 $60,000 80,000 25,000 37,500 40,000 50,000 20,000 20,000 50,000 65,000 Office Salaries 30,000 30,000 Advertising 45,000 45,000 Other 15.000 20.000 Total $365.000 $477,500
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 14MC: A company produces two products. E and F in batches of 100 units. The production and cost data are:...
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Question
a) Classify each cost element as either fixed, variable, or mixed
b) Calculate:
i) the variable production cost per unit and the total fixed production overhead.
ii) The total variable cost per unit and the total fixed costs
Hint: Use the high-low method to separate mixed costs into their fixed and variable components
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