ces Anand Limited manufactures drones for industrial use. Most of their costs are either true variable costs or fixed costs. However, an account analysis shows the following items are mixed costs. Production supervision Utilities Sales staff wages* Quality control inspections** Account *The 30% variable portion relates to sales commissions based on total sales. **50% of manufactured units are inspected each year. In 2019 Anand Limited produced and sold 500 drones at $2,000 each. Account Production supervision Utilities Sales staff wages Quality control inspections Required: 1. Management expects to sell 700 drones in 2020, does not anticipate any cost increases due to inflation, and plans to maintain the sales price of $2,000 per drone. Estimate total costs for each of the mixed cost items above. Be sure to show the variable and fixed components of the total cost. Sales Variable Costs: Direct materials Direct labour Contribution margin Fixed Cost Variable Cost $ 120,000 $ 12,000 140,000 $ 36,000 69 $ Analysis 80% fixed 20% fixed 70% fixed 90% fixed $ $ 2. Assuming direct material costs are $500 per unit and direct labour costs are $250 per unit, calculate the expected contribution margin for 2020 based on sales of 700 drones. 350,000 175,000 $ $ $ $ $ $ $ 1,400,000 2019 Total Cost $150,000 $ 60,000 $200,000 $ 40,000 Total 525,000 875,000 120,000 12,000 140,000 36,000

Anand Limited manufactures drones for industrial use. Most of their costs are either true variable costs or fixed costs. However, an account analysis shows the following items are mbed costs -The 30% variable portion relates to sales commissions based on total sales. " 50% of manufactured units are inspected each year. In 2019 Anand Limited produced and sold 500 drones at \$2,000 each. Required: 1. Management expects to sell 700 drones in 2020 , does not anticipate any cost increases due to inflation, and plans to maintain the sales price of $2.000 per drone. Estimate total costs for each of the mixed cost items above. Be sure to show the variable and fixed components of the total cost 2. Assuming direct material costs are $500 per unit and direct labour costs are $250 per unit, calculate the expected contribution margin for 2020 based on sales of 700 drones