Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ENZ Manufacturing Company manufactures water filters at a selling price per unit of $60. The following information is available regarding costs at 7,000 units and
ENZ Manufacturing Company manufactures water filters at a selling price per unit of $60. The following information is available regarding costs at 7,000 units and 10,000 units of monthly production for 2021: Production volume 7,000 10,000 Factory supervisors' salaries $12,000 $12,000 Direct labour 56,000 80,000 Indirect labour and materials 21,000 30,000 Depreciation on machinery 10,000 10,000 Electricity 15,000 21,000 Direct materials 70,000 100,000 Rental of factory Total 16,000 16,000 $200,000 $269,000 Required: (a)(ii)Explain the cost behaviour of the costs classified under each of the above respective headings. (b) Develop a monthly cost formula for each of the mixed cost identified in part (a) above. Show all workings. (c) Calculate the expected total costs for the first quarter of 2022 if ENZ forecasts to produce a total production volume of 28,000 units. Work out the total expected cost for 28000 units: Total variable cost is xxx Total fixed cost is xxx Total mixed cost is xxx Total expected costs is xxx
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started