Question
Incremental Costs The Benson Company has collected the follwing production cost data: Production 0 Units 10 Units 20 Units Depreciation $1,000 $1,000 $1,000 Supplies 0
Incremental Costs
The Benson Company has collected the follwing production cost data:
Production
0 Units 10 Units 20 Units
Depreciation $1,000 $1,000 $1,000
Supplies 0 800 1,600
Property Taxes 500 500 500
Labor 0 2,000 4,000
Materials 0 3,000 6,000
In addition, the company has found that repair and maintenance expense follows the followingstep behavior:
Production Repair and Maintenance Expense
0-5 units $400
6-10 units 800
11-15 units 1,200
16-20 units 1,600
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 calculations)
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