Reference no: EM131802060

Bonita 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
Production Costs	Total Cost	Cost/Unit	Total Cost	Cost/Unit
Direct materials	$8,000	$1.60	$16,000	$1.60
Direct labor	9,500	1.90	19,000	1.90
Utilities	2,000	0.40	3,300	0.33
Rent	4,000	0.80	4,000	0.40
Maintenance	800	0.16	1,400	0.14
Supervisory salaries	1,000	0.20	1,000	0.10

(b) Classify each cost above as either variable, fixed, or mixed.

Exercise 19-3 The controller of Norton Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Month	Total  Maintenance Costs		Total  Machine Hours
January	$2,660	320
February	2,960	370
March	3,560	520
April	4,460	670
May	3,160	520
June	5,760	720

Determine the variable cost components using the high-low method. (Round variable cost to 3 decimal places e.g. 12.250.)

Determine the fixed components using the high-low method. (Round answer to 0 decimal places e.g. 2,520.)