Q1) Sandburg Manufacturing manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for the production of 2,000 units. The companys Utilities and Maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively.

Costs Incurred

Production in Units 2,000 4,000

Production Costs

a. Direct Materials $6,000 ?

b. Direct Labor 16,000 ?

c. Utilities 1,000 ?

d. Rent 3,000 ?

e. Indirect Labor 4,200 ?

f. Supervisory Salaries 1,500 ?

g. Maintenance 1,000 ?

h. Depreciation 2,500 ?

Instructions

Calculate the expected costs to be incurred when production is 4,000 units. Use your knowledge of cost behavior to determine which of the other costs are fixed or variable.

Q2) Kipling Company has sales of $1,500,000 for the first quarter of 2022. In making the sales, the company incurred the following costs and expenses.

	Variable	Fixed
Product costs	$500,000	$550,000
Selling expenses	100,000	75,000
Administrative expenses	80,000	67,000

Instructions

Prepare the companys income statement under CVP for 2022.