Bonita Company ma a single product Annual Costs Incurred 500

Bonita Company ma a single product. Annual Costs Incurred 5,000 10,000 Total Cost Cost/UnitTotal Cost Cost/Unit Direct materials Direct labor $8,000 9,500 2,000 4,000 $1.60 1.90 0.40 $16,000 19,000 3,300 4,000 1,400 1,000 $1.60 1.90 0.33 0.40 0.14 0.10 Maintenance 0.16 Utilities Supervisory salaries Click if you

Solution

Production Costs: Direct Materials Variable Direct Labor Variable Utilities Mixed Rent Fixed Maintenance Mixed Supervisory Salaries Fixed Working: a. Variable costs remain same for per unit at all level.So,Direct Materials and direct Labors are variable costs as Cost per unit is same for all level. b. Fixed costs are same in total at all level.So,Rent and Supervisroy salaries are classified as Fixed as these are same in total for all level. c. Mixed costs are those costs that varies per unit as well as in total. So, Utilities and maintenance are mixed costs as these costs vary in per unit as well as in total.