• PQR Manufacturing produces industrial machinery. Calculate the direct costs, fixed costs, variable costs, and total operating costs for a production run of 2,000 units based on the following information:
  • Direct materials: $40,000
  • Direct labor: $25,000
  • Factory rent (fixed): $20,000 per month
  • Utilities (variable): $1,500 per month plus $1.50 per unit
  • Depreciation (fixed): $25,000 annually
  • Other operating expenses (variable): $1,000 plus $2 per unit.