question archive ABC Firm reports the following for the final three months of 2020: October November December Units Produced Units Sold 6,500 4,500 7,000 8,500 4,000 4,800 $39,975 30,225 $46,975 32,550 $40,500 18,600 COGS Direct Materials Used Depreciation of ory Machines Shipping Cost Rent Utilities in Administrative Facility 7,280 5,600 3,125 7,840 5,600 3,125 4,480 5,600 3,125 19,250 27,650 19,880 1
ABC Firm reports the following for the final three months of 2020: October November December Units Produced Units Sold 6,500 4,500 7,000 8,500 4,000 4,800 $39,975 30,225 $46,975 32,550 $40,500 18,600 COGS Direct Materials Used Depreciation of ory Machines Shipping Cost Rent Utilities in Administrative Facility 7,280 5,600 3,125 7,840 5,600 3,125 4,480 5,600 3,125 19,250 27,650 19,880 1
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ABC Firm reports the following for the final three months of 2020: October November December Units Produced Units Sold 6,500 4,500 7,000 8,500 4,000 4,800 $39,975 30,225 $46,975 32,550 $40,500 18,600 COGS Direct Materials Used Depreciation of ory Machines Shipping Cost Rent Utilities in Administrative Facility 7,280 5,600 3,125 7,840 5,600 3,125 4,480 5,600 3,125 19,250 27,650 19,880 1. For each cost, determine whether it is fixed, variable or mixed. You will have to think carefully about the appropriate level of activity for each cost: units sold or units produced. 2. Prepare a cost function for each cost.
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| 1 | COGS | Mixed | |
| Direct Material Used | Variable | ||
| Depreciation of Factory Machines | Variable | ||
| Shipping Cost | Fixed | ||
| Rent | Fixed | ||
| Utilities in Administrative Facility | Mixed | ||
| Let the no of units produced be x and no of units sold y | |||
| 2 | COGS: $32,100 + $1.75y | ||
| Direct Material Used: $4.65x | |||
| Depreciation of Factory Machines: $1.12x | |||
| Shipping Cost: $5,600 | |||
| Rent: $3,125 | |||
| Utilities in Administrative Facility: $9,800 + $2.1y |
