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Incremental Costs The Benson Company has collected the follwing production cost data: Production 0 Units 10 Units 20 Units Depreciation $1000 $1000 $1000 Supplies 0
Incremental Costs
The Benson Company has collected the follwing production cost data:
Production
0 Units | 10 Units | 20 Units | |
---|---|---|---|
Depreciation | $1000 | $1000 | $1000 |
Supplies | 0 | 800 | 1600 |
Property Taxes | 500 | 500 | 500 |
Labor | 0 | 2000 | 4000 |
Materials | 0 | 3000 | 6000 |
In addition, the company has found that repair and maintenance expense follows the following stepbehavior:
Production | Repair and Maintenance Expense |
---|---|
0-5 units | $400 |
6-10 units | 800 |
11-15 units | 1200 |
16-20 units | 1600 |
Required:
What would be the incremental production costs for an additional 10 units after the Benson Company has produced 8 units? (Explain each step and calculation)
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