Problem III

Grace Viera has the following cost schedule for her, ahem, new business venture:

October: 1,000 units produced at a cost of $101,600

Cost Detail

Material, $42,000-variable cost

Direct Labor, $15,000-variable cost

Depreciation, $8,000-fixed

Phone, $200-fixed

Other utilities, $4,000-20% fixed

Supervisory Salaries, $20,000-80% fixed

Equipment Repair, $6,000-10% fixed

Indirect Materials, $400-Variable

Factory Maintenance, $6,000-90 fixed

Estimated fixed cost per month and variable costs per unit produced.

Based on your answers to #1, what is your estimated of the incremental cost of producing 200 units?