P2

Classify the costs as variable, fixed, or mixed. Using the high-low method, separate mixed costs into their variable and fixed components. Use total hours worked as the basis. Compute the average cost per job for the year. Use3 estimated hours to determine utilities costs. Project the average cost per job for next year if variable costs per job increase 20 percent. (Round to two decimal places.) Why can actual utilities costs vary from the amount computed using the utilities cost formula? Park & Morgan, a law firm, is considering opening a legal clinic for middle and low-income clients. The clinic would bill at a rate of S18 per hour. It would employ law students as paraprofessional help and pay them $9 per hour. Other variable costs are anticipated to be $5.40 per hour, and annual fixed costs arc expected to total $27,000. Compute the breakeven point in billable hours. Compute the breakeven point in total billings. Find the new breakeven point in total billings if fixed costs should go up by $2, 340. Using the original figures, compute the breakeven point in total billings if the billing rate decreases by $1 per hour, other variable costs decrease by $0.40 per hour, and fixed costs go down by $3, 600. All Honors Industries is considering a new product for its Trophy Division. The product, which would feature an alligator, is expected to have global market appeal and to become the mascot for many high school and university athletic teams. Expected variable unit costs are as follows: direct materials, $18.50; direct labor, $4.25; production supplies, $1.10; selling costs, $2.80; and other, $1.95. Annual fixed costs are depreciation, building, and equipment, $36,000; advertising, $45,000; and other, $11, 400. Plans are to sell the product for $55