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QUESTION 1 1. (a) Identify the costs below as other variable, fixed, or mixed, (b) Also, thoroughly and clearly support your identity of each cost
QUESTION 1 1. (a) Identify the costs below as other variable, fixed, or mixed, (b) Also, thoroughly and clearly support your identity of each cost 5 points a. Wages of worker drying, and detailing the car b. Utility, hot water heaters c. Straight-line method depreciation on the car wash building d. Soap used in the car wash 2. The highest month of auto maintenance costs is December for Jones Auto Repair The total cost equals 55,775 when the total maintenance requisitions (RECs) was 10,000 During the lowest month of June the telephone costs was equal to $3,300 and the total maintenance requisitions was 4,375 RECs. Pauline Jone, owner of the repair shop, asks you to estimate the maintenance cost for September if the projected RECs is 7,190. Show all computations 5 points 3. Raeford is asking for your help in determining the cost structure of his custom car sign painting company. He provides the following information: Utility $ 4,500/month Depreciation on Saws and other equipment $ 2,450/month Advertising $ 1,200/month Insurance $ 1,500/month Material (paint other) $420/car Direct labor $350/car Indirect labor $70/car Raeford charges $1,750 per car Required: (Be sure to label ALL relevant amounts and calculations) 10 points a Advise Raeford on how many cabinets he should build/sell per month so that his business will be at break even b. What if Raeford decides to raise the price of the cabinets to $2,000/car? How will your answer to #1 change? c. Before making the price change, what should Raeford think about and consider regarding his business? Be specific
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