Question: Toledo Toy Company incurred the following costs during 20x4 The

Toledo Toy Company incurred the following costs during 20x4. The company sold all of its products manufactured during the year.
Direct material.......................................................... $4,500,000
Direct labor................................................................ 3,300,000
Manufacturing overhead:
Utilities (primarily electricity)................................... 210,000
Depreciation on plant and equipment....................... 345,000
Insurance................................................................... 240,000
Supervisory salaries................................................... 450,000
Property taxes........................................................... 315,000
Selling costs:
Advertising.............................................................. 292,500
Sales commissions.................................................... 135,000
Administrative costs:
Salaries of top management and staff....................... 558,000
Office supplies.......................................................... 60,000
Depreciation on building and equipment................. 120,000
During 20x4, the company operated at about half of its capacity, due to a slowdown in the economy. Prospects for 20x5 are slightly better. Jared Lowes, the marketing manager, forecasts a 30 percent growth in sales over the 20x4 level.

Required:
Categorize each of the costs listed above as to whether it is most likely variable or fixed.
Forecast the 20x5 cost amount for each of the cost items listed above.


View Solution:


Sale on SolutionInn
Sales2
Views238
Comments
  • CreatedApril 22, 2014
  • Files Included
Post your question
5000