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Monroe Manufacturing produces and sells a product with a price of $100/unit. The following data has been prepared for its estimated upper and lower levels

Monroe Manufacturing produces and sells a product with a price of $100/unit. The following data has been prepared for its estimated upper and lower levels of activity.

Production Category

Lower Limit

Upper Limit

Units of Production

4,000 units

6,000 units

Direct Materials

$60,000

$90,000

Direct labour

$80,000

$120,000

Manufacturing Overhead:

Indirect materials

$25,000

$37,500

Indirect labour

$40,000

$50,000

Depreciation

$20,000

$20,000

Selling and Admin. Expenses:

Sales salaries

$50,000

$65,000

Office salaries

$30,000

$30,000

Advertising

$45,000

$45,000

Other

$15,000

$20,000

Totals

$365,000

$477,500

The variable expenses for Monroe Manufacturing are

all categories of selling and administrative expenses.

direct materials, direct labour, sales salaries.

indirect materials, indirect labour, direct materials, and direct labour

indirect materials, direct materials, and direct labou

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