Question

Helena Company reports the following total costs at two levels of production. Classify each cost as variable, fixed, or mixed. 5,000 Units 10,000 Units Indirect labor $ 3,000 $ 6,000 Property taxes 7,000 7,000 Direct labor 28,000 56,000 Direct materials 22,000 44,000 Depreciation 4,000 4,000 Utilities 5,000 7,000 Maintenance 9,000 11,000

Answer 1

Step-by-step explanation:

Mainly there are three types of cost i.e variable cost, fixed cost, and the mixed cost. The variable cost is that cost which is change when the production level change in the same proportion like as in double units. whereas the fixed cost is that cost which remains constant whether production level changes or not . The mixed cost is that cost which include some part of variable cost and the fixed cost

So, the variable cost includes indirect material, indirect labor, and factory supplies

The fixed cost includes supervision, taxes ,and depreciation expense.

The mixed cost includes utilities,maintenance,etc

So, the categorization is shown below:

Indirect labor - Variable cost

Property taxes - Fixed cost

Direct labor - Variable cost

Direct material - Variable cost

Depreciation - Fixed cost

Utilities - Mixed cost

Maintenance - Mixed cost