Calculate the expected costs to be incurred

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Problem

Sandburg Manufacturing manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for the production of 2,000 units. The Utilities and Maintenance are mixed costs. The fixed portions of these costs are $300 and $200, respectively.

Calculate the expected costs to be incurred when production is 4,000 units. Use your knowledge of cost behavior to determine which of the other costs are fixed or variable.

Costs Incurred

 

Production in Units

2,000

4,000

Type of cost

Production Costs





a.

Direct Materials

$  6,000

$       

 MixedVariableFixed


b.

Direct Labor

16,000


 FixedVariableMixed


c.

Utilities

1,000


 MixedFixedVariable


d.

Rent

3,000


 MixedFixedVariable


e.

Indirect Labor

4,200


 FixedVariableMixed


f.

Supervisory Salaries

1,500


 MixedFixedVariable


g.

Maintenance

1,000


 VariableFixedMixed


h.

Depreciation

2,500


 FixedMixedVariable


Reference no: EM131800232

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