Question

Using cost behavior patterns MFG Company experiences the following cost behavior patterns each week: Fixed costs: supervisor’s salary $1,600; factory rent $3,700 Mixed costs: utilities $2,100 + $6.75 per unit Variable costs per unit: manufacturing labor wages $23.00; supplies used in production $10.00; packaging cost $3.75; warranty cost $4Required:Compute total costs to be incurred for a week with 2,750 units of activity.

Answer 1

Total cost= $138,025

Step-by-step explanation:

Giving the following information:

Fixed costs:

supervisor’s salary $1,600

factory rent $3,700

Mixed costs:

utilities $2,100 + $6.75 per unit

Variable costs per unit:

manufacturing labor wages $23.00

supplies used in production $10.00

packaging cost $3.75

warranty cost $4

Units produced= 2,750

First, we need to calculate the total variable cost:

Total variable cost= 2,750*(6.75 + 23 + 10 + 3.75 + 4)

Total variable cost= $130,625

Now, the total fixed cost:

Total fixed cost= 1,600 + 3,700 + 2,100

Total fixed cost= $7,400

Finally, the total cost:

Total cost= 130,625 + 7,400

Total cost= $138,025