Question
The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company is currently operating at
The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company is currently operating at 80% of its full capacity of 2,300 sets per quarter. Quarterly cost data at this level of operations follow: Factory labour, direct Advertising Factory supervision $119,500 50,300 40,300 Property taxes, factory building 3,800. Sales commissiona #1,500 Insurance, factory Depreciation, office equipment 2,800 4,300 Lease cost, factory equipment Indirect materials, factory 12,300 6,300 Depreciation, factory building 10,300 General office supplies (billing) 3,300 General office salaries 61,500 Direct materials used (wood, bolts, etc.) Utilities, factory 95,500 20,300 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. As examples, this has been done already for the first two items in the preceding list. Note that each cost item is classified in two ways: first, as variable or fixed, with respect to the number of units produced and sold, and, second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect as shown.) Cost Item Cost Behaviour Variable Seding and Administrative Product Cost Fixed Cost $ 119,500 Direct Indirect $ 119,500 50,300 50.300 Factory labour, direct Advertising Factory supervision 40,300 40.300
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