TABLE 1: Direct Materials

MATERIAL	QUANTITY PER UNIT	COST	TOTAL PER UNIT
CORN	3 LBS	$0.50	$1.50
SEASONING	1 OUNCE	$0.05	$0.05
PACKAGING	1 CARDBOARD BOX4	0.20	$0.20
TOTAL COST			$1.75

*sold in 16 oz boxes

TABLE 2: Direct Labor

JOB DESCRIPTION	HOURS PER UNIT	RATE	TOTAL COST
PROCESSOR	0.1	$10.50	$1.05
BAKER	0.04	$10.50	$0.42
PACKAGER	0.02	$10.50	$0.21
TOTAL COST			$1.68

TABLE 3: YEARLY OVERHEAD COSTS

COST DESCRIPTION	AMOUNT
INDIRECT MATERIAL	$9,060
INDIRECT LABOR	$60,000
MACHINE MAINTENANCE	$5,275
ELECTRICITY	$7,985
DEPRECIATION	$7,200
QUALITY TESTING	$6,480
TOTAL	$96,000

Table 4 gives you the information for the last two months on the overhead cost. Use this information to determine the fixed and variable portions of the cost. (You will need this information to complete Table 5). Machine hours have been determined as the best cost driver for separating mixed cost into their fixed and variable portions. It takes approximately 10 minutes of total machine time for each cereal box (or 1/6 a machine hour per box of cereal).

TABLE 4: Actual Overhead cost for the last two months:

	MONTH 1	MONTH 2
INDIRECT MATERIAL	$755	$$755
INDIRECT LABOR	5,000	5,000
MACHINE MAINTENANCE	338	410
ELECTRICITY	504	630
DEPRECIATION	600	600
QUALITY TESTING	428	500
MACHINE HOURS	1,200	1,500

*10 Minutes of machine time per box of cereal (1/6 hour = 1 unit)

TABLE 5: Variable & Fixed Costs

COST DESCRIPTION	VARIABLE COST PER UNIT	FIXED COST PER YEAR
TOTAL

If a cost is mixed, put the fixed amount in the fixed column and the variable amount in the variable column.

1. Use this information to determine the fixed and variable portions of the cost.

2. Complete table 5.