Week

Units of Output

Direct Materials

Direct Labor

Indirect Labor

Indirect Materials

Electricity

Factory Insurance

Other Overhead

Windward

1

800

$600

1000

$360

$600

$230

$250

$620

2

1000

750

1250

400

600

250

250

720

Unit

Total

Cost of

3

1200

900

1500

440

600

270

250

820

Variable

Fixed

1000

Units

Manufacturing Cost

Cost

Cost

Total

Per Unit

Enter F, V, or M

V

V

M

F

M

F

M

Direct materials

Direct labor

Instructions:

Indirect labor

The purpose of this exercise is to help you to understand how costs behave relative to activity volume and

Indirect material

how to differentiate between total and per-unit fixed, variable, and mixed costs.

Electricity

Complete all the highlighted cells in this worksheet. Use Excel formulas for all computations.

Factory Insurance

Other overhead

1)

Determine whether each of the manufacturing costs listed above are fixed, variable, or mixed.

Total Manufacturing Costs

Enter F, V, or M into the appropriate boxes above.

Hint: if the total cost of an item is the same for all levels of output, the cost is fixed;

Administrative and Selling

if the unit cost of an item is the same for all levels of output, the cost is variable;

Admin/Selling Expenses

otherwise, the cost is mixed.

Total Costs

2)

Complete columns L and M in the table to the right.

For items categorized as variable ('V'): Enter the Excel formula to compute unit variable cost (in column L).

For items categorized as fixed ( 'F'): enter the total fixed cost (in column M).

For items categorized as mixed ('M'): See #3, below, for instructions.

3)

Use the High-Low method to separate mixed costs into their fixed and variable components.

Use Excel formulas to compute the fixed and variable costs. You may use the High-Low Worksheet to show

the computations or enter the formulas directly into the appropriate cells in the table.

Note: If you use the High-Low Worksheet, enter cell references in the table to the right to 'feed' your answers

answers from the worksheet.

4)

Use Excel formulas to compute Total cost of 1000 units for each cost item (in column O).

Use the information from columns L and M for your computations.

DO NOT feed totals from the original given data table. I need to see that you know how to compute

the amounts.

5)

Compute the Per-Unit cost for each cost item (in column P).

I need also to see the computations. Thank you!