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

Instructions
(a) Define the terms variable costs, fixed costs, and mixed costs.
(b) Classify each cost above as either variable, fixed, ormixed.

Transcribed Image Text:

Costs Incurred Production in Units 5,000 Cost/ Unit Total Total Cost Production Costs Direct materials Direct labor $8,250 $1.65 $16,500 $1.65 9,500 Rent Maintenance Supervisory salaries 1.90 0.30 0.80 0.16 0.20 19,000 2,500 4,000 1,100 1,000 4,000 800 0.40 0.11