Turgros Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for two levels of production.

Cost Incurred
Production in Units	5,000	10,000
Production Costs	Total Cost	Cost/Unit	Total Cost	Cost/Unit
Direct materials	$8,000	$1.60	$16,000	$1.60
Direct labor	9,500	1.90	19,000	1.90
Utilities	2,000	0.40	3,500	0.35
Rent	4,000	0.80	4,000	0.40
Maintenance	800	0.16	1,100	0.11
Supervisory salaries	1,000	0.20	1,000	0.10

Instructions

(a) Classify each cost above as either variable, fixed, or mixed

Using these criteria as a guideline, the classification is as follows:

Production Costs	Classification	Production Costs	Classification

E22-3 The controller of Furgee Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Month	Total Maintenance Cost	Total Machine Hours
January	$2,500	300
February	3,000	350
March	3,600	500
April	4,500	690
May	3,200	400
June	4,900	700

Instructions

(a) Determine the fixed- and variable-cost components using the high-low method.

(a)

First Compute Variable Cost Per Unit

	Cost ($)	Sales in Units
High	$
Low
Difference	$
Variable Cost Per Unit =

	High Volume	Low Volume
Total Cost	$	$
Less: High Volume Variable Cost
Less: Low Volume Variable Cost
Fixed Cost

If the Company produced 6,000 units, how much is the total production cost?

	$
Total Production Cost	$

E22-4 Family Furniture Corporation incurred the following costs.

Cost	Variable Cost	Fixed Cost	Mixed Cost
1. Wood used in the production of furniture.
2. Fuel used in delivery trucks.
3. Straight-line depreciation on factory building.
4. Screws used in the production of furniture.
5. Sales staff salaries.
6. Sales commissions.
7. Property taxes.
8. Insurance on buildings.
9. Hourly wages of furniture craftsmen.
10. Salaries of factory supervisors.
11. Utilities expense.
12. Telephone bill.

Problema 22-2A Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2014, management estimates the following revenues and costs.

Sales	$1,800,000	Selling expenses--variable	$70,000
Direct materials	430,000	Selling expenses--fixed	65,000
Direct labor	360,000	Administrative expenses--variable	20,000
Manufacturing overhead--variable	380,000	Administrative expenses--fixed	60,000
Manufacturing overhead--fixed	280,000

Instructions

1. CVP income statement for 2014 based on management's estimates. (Show column for total amounts only.)

CVP Income Statement (Estimated)
	Units	Unit Cost	%	Amount	%
Sale				$
Less Variable Cost
Total Variable Cost
Contribution Margin
Less: Fixed Cost
				$
Total Fixed Cost				$
Net Income				$

1. Compute the break-even point in (1) Units and (2) Dollars.Muestre la formula y los cmputos.

1. BEP in Units =

1. BEP in Dollars ($) =

(c) Compute the contribution margin ratio and the margin of safety ratio. (Round to nearest full percent.)

Contribution Margin Ratio: Presente los cmputos

1. Determine the sales dollars required to earn net income of $180,000

Sales Dollars ($) - Presente los cmputos.

E22-17 Felde Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2014, the company incurred the following costs.

Variable Costs per Unit

Direct materials ..................................... $7.50

Direct labor ....................................... ....$2.45

Variable manufacturing overhead ................ $5.80

Variable selling and administrative expenses ....$3.90

Fixed Costs per Year

Fixed manufacturing overhead ................$225,000

Fixed selling and administrative expenses ... 240,100

Felde Company sells the fishing lures for $25. During 2014, the company sold 80,000 lures and produced 90,000 lures.

Instructions

1. Assuming the company uses Variable Costing, calculate Felde's manufacturing cost per unit for 2014

Manufacturing Cost per Unit under Variable Costing Method
Cost	Amount
	$
Total Manufacturing Unit Cost	$

1. variable costing income statement for 2014

Variable Costing Income Statement
Sales
Variable costs:
Total Variable costs
Contribution Margin
Fixed Costs
Total Fixed Costs
Net Income or (Loss) from operation

1. Assuming the company uses absorption Costing, calculate Felde's manufacturing cost per unit for 2014.

Manufacturing Cost per Unit under Absorption Costing Method
Cost	Amount
	$
Total Manufacturing Unit Cost	$

1. absorption costing income statement for 2014

Absorption Costing Income Statement
Sales
Cost of Goods Sold:
Finished Goods Beg. Inventory
Cost of Goods Manufactured
= Cost of Goods Available for Sale
Finished Goods Ending Inventory
= Cost of Goods Sold
Gross Profit
Operating Expenses
Total Operating Expenses
Net Income (loss) or Income (loss) from operating

1. The variable costing and the absorption costing income from operations reconciliation:

	2014
Variable costing income (loss)		$
Fixed MOH expensed with variable costing	$
Less: Fixed MOH expensed with absorption costing
Difference
Absorption costing income		$