Production machines must be cleaned monthly regardless of t

° Production machines must be cleaned monthly, regardless of the amount of use.* The more cans produced, the more lubrication is needed.+ ° Chen\'s monthly production and sales volume is usually at least 1,000 cans, but can be as much as 5,000 cans depending on demand.v Material handling costs include depreciation on equipment and fuel for loaders. * Cans are packaged into 100-unit groups prior to sale.+ Research and development costs vary between $10,000 and S10,500 per month. The factory maintenance costs vary between $6,000 and $6,500 monthly » Chen\'s staff level is constant at 25 people, who are all paid salaries. ° Raw materials are purchased based on expected production levels.* * Sales commissions (based on a per-case amount) are included in marketing department costs.- Yi-Fan has classified the costs into three categories: fixed, variable, and mixed. red: Place an X in the appropriate column of the table below to indicate the most likely behaviour of each cost:+ Fixed»|Variable Mixedv Oil to lubricate the machines Sa Annual subscription to a trade iournal Vacation pay for salaried production employees Packaging materialsp Research and development? Raw materials Material handling costs Marketingd Factory maintenance y of the plant manager costs

Solution

Answer:-

A) Oil to Lubricate the Machines - ------- Variable ( more cans produced more lubrication is needed)

B) Salary of the Plant managers ------------- Fixed ( Staff Level is constant 25 people )\'

C) Annual Subscription to trade journal---- Fixed ( as Annual Subscriptions are fixed obligation)

D) Vacation pay for salaried production----- Variable
emloyess

E) Packaging materials ---------------------------Variable ( as more cans produced more packaging required)

F) Reseach and Development ----------------Mixed ( as changes from 10,000 to $ 10,500 per month)

G) Raw materials ----------------------------------variable ( as more cans produced more raw material required)

H) Material Handling Costs--------------------- MIXED ( Material handling costs includes - Depreciation is a
fixed cost, because it recurs in the same amount per period throughout the useful life of an asset, Fuels for loaders is a operational cost which varrys with usage )

I) Marketing Department costs --------------- Variable ( Commission based on per case amount thats why it /
a variabl expense as it increase per case )

J) Factory Maintenance Costs-----------------MIXED ( Varry between 6000 to $ 6500 Monthly )