Chapter 12 Homework - Answers:

For each of the following costs, identify the cost behavior as variable, mixed, or fixed: 1. Wages of assembly line workers _________________ 2. President's salary _________________ 3. Plant utilities _________________ 4. Sales force commissions _________________ 5. Shipping costs _________________ 6. Factory rent _________________ 7. Research and development expenses _________________ 8. Property taxes _________________ 9. Advertising _________________ 10. Supplies used in production _________________ XYZ Company incurred the following costs for the month of August when it observed an activity level of 10,000 units.

Activity level in units	10,000
Variable costs	$30,000
Fixed costs	50,000
Mixed costs	40,000
Total costs	$120,000

During October, the activity level was 16,000 units, and the total costs incurred were $150,000. a. Calculate the variable costs, fixed costs, and mixed costs incurred during October. b. Use the high-low method to calculate the cost formula for mixed costs. c. If the activity level were expected to be 13,800 units for the month of December, what amount of total costs would be expected?