Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data,
Question:
Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) below.
Units | Total | Total | Total Machine |
Produced | Lumber Cost | Utilities Cost | Depreciation Cost |
7,000 shelves | $84,000 | $9,050 | $125,000 |
14,000 shelves | $168,000 | $17,100 | $125,000 |
28,000 shelves | $336,000 | $33,200 | $125,000 |
35,000 shelves | $420,000 | $41,250 | $125,000 |
Requirements:
1. Determine whether the costs in the table are variable, fixed, mixed, or none of these.
2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N= Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the table below with your answers.
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso