PROBLEM: Front Range Furniture expects to maintain the same inventories at the end of 2020 as at the beginning of the year. The total of all production costs for the year is assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs of their departments during the year. A summary report of these estimates is as follows:

Estimated variable cost Estimated Fixed cost

Production costs:

Direct material 50

Direct labor 30

Factory overhead 350,000

Selling Expense:

Sales salaries/ commission 4 340,000

Travel 4,000

Advertising 116,000

Miscellaneous Selling expenses 1 2,300

Administrative Expenses:

Management and office staff salaries 325,000

Office supplies 4 6,000

Misc. Administrative expenses 1 8,700

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$90 $1,152,000

Its expected that 12,000 units will be sold at a price of $240 per unit. Maximum sales within the relevant range are 18,000.

Required: Complete the chart in your working papers to calculate total fixed and variable costs (see the Working Papers for more detailed instructions).