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Sharp Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for the production of 2,000 units. Utilities is a mixed cost. The fixed portion of this cost is $300.
Production Costs
a. Direct Materials $ 4,000b. Direct Labor 14,000c. Utilities 1,000d. Rent 2,200e. Indirect Labor 3,600f. Supervisory Salaries 1,300
Problem 1: Calculate the expected costs to be incurred when production is 2,400 units. Use your knowledge of cost behavior to determine which of the costs are fixed or variable.
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