Monokubs produces frozen gourmet vegetarian pizzas. The following information is available: Electricity bills show electricity costs of $3,000 per month plus an average of $0.02 per pizza. Payroll records show that supervisory salaries total $8,000 per month. Wage records show that wages and on-costs for production employees are $0.05 per pizza. Inspection of several invoices from ingredient suppliers indicate that the ingredients per pizza cost on average $1.90. Depreciation schedules show that the monthly depreciation on factory building and equipment is $21,000. Required: Classify the costs in terms of variable, semi-variable and fixed costs, and form a cost function used to calculate monthly production cost.
Monokubs produces frozen gourmet vegetarian pizzas. The following information is available: Electricity bills show electricity costs of $3,000 per month plus an average of $0.02 per pizza. Payroll records show that supervisory salaries total $8,000 per month. Wage records show that wages and on-costs for production employees are $0.05 per pizza. Inspection of several invoices from ingredient suppliers indicate that the ingredients per pizza cost on average $1.90. Depreciation schedules show that the monthly depreciation on factory building and equipment is $21,000. Required: Classify the costs in terms of variable, semi-variable and fixed costs, and form a cost function used to calculate monthly production cost.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...
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Monokubs produces frozen gourmet vegetarian pizzas. The following information is available:
- Electricity bills show electricity costs of $3,000 per month plus an average of $0.02 per pizza.
- Payroll records show that supervisory salaries total $8,000 per month.
- Wage records show that wages and on-costs for production employees are $0.05 per pizza.
- Inspection of several invoices from ingredient suppliers indicate that the ingredients per pizza cost on average $1.90.
Depreciation schedules show that the monthly depreciation on factory building and equipment is $21,000.
Required:
- Classify the costs in terms of variable, semi-variable and fixed costs, and form a cost function used to calculate monthly production cost.
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