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(b) Which plan would give higher income if the volume is (i) above and (ii) below the volume calculated in part (a). Why? 4. Donn
(b) Which plan would give higher income if the volume is (i) above and (ii) below the volume calculated in part (a). Why? 4. Donn Capp, the CFO, suspects that indirect labor costs, which the company has traditionally viewed as being variable, may actually be a mixed cost. In March 2016 when the production volume was at a low of 15,000 units, the indirect labor cost was $4,000. In September 2016 when production volume was at its highest level (40,000 units), the indirect labor cost was $9,000. What would be your estimate of the total indirect labor cost for the year under Plan A (Le. for 390,000 units)? Assume the cost would be unaffected by inflation
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