Exercise 19-1

Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for two levels of production.

Costs Incurred
Production in Units	5,000	10,000
Production Costs	Total Cost	Cost/Unit	Total Cost	Cost/Unit
Direct materials	$8,000	$1.60	$16,000	$1.60
Direct labor	9,500	1.90	19,000	1.90
Utilities	2,000	0.40	3,300	0.33
Rent	4,000	0.80	4,000	0.40
Maintenance	800	0.16	1,400	0.14
Supervisory salaries	1,000	0.20	1,000	0.10

(b)

Classify each cost above as either variable, fixed, or mixed.

Production Costs
Direct materials

Direct labor

Utilities

Rent

Maintenance

Supervisory salaries

Exercise 19-3 The controller of Norton Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Month	Total Maintenance Costs	Total Machine Hours
January	$2,660	320
February	2,960	370
March	3,560	520
April	4,460	670
May	3,160	520
June	5,760	720

Determine the variable cost components using the high-low method. (Round variable cost to 3 decimal places e.g. 12.250.)

Variable cost per machine hour

$

Determine the fixed components using the high-low method. (Round answer to 0 decimal places e.g. 2,520.)

Total fixed costs

$