Question
Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining
Cost Behavior
Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow.
Units Produced | Total Lumber Cost | Total Utilities Cost | Total Machine Depreciation Cost |
5,000 shelves | $60,000 | $7,250 | $145,000 |
10,000 shelves | 120,000 | 13,000 | 145,000 |
20,000 shelves | 240,000 | 24,500 | 145,000 |
25,000 shelves | 300,000 | 30,250 | 145,000 |
1. Determine whether the costs in the table are variable, fixed, mixed, or none of these.
Lumber | Variable Cost |
Utilities | Mixed Cost |
Depreciation | Fixed Cost |
2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two decimal places.
Cost | Fixed Portion of Cost | Variable Portion of Cost (per Unit) |
Lumber | $fill in the blank | $fill in the blank |
Utilities | fill in the blank | fill in the blank |
Depreciation | fill in the blank | fill in the blank |
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