Fowler Company Manufactures A Single Product

Text Problems Week 4ACC/349E5-1 Fowler Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for two levels of production.Costs Incurred Production in Units 5,000 10,000Production Costs Total Cost/ Cost Unit Total Cost/ Cost UnitDirect materials $8,250 $1.65 $16,500 $1.65Direct labor 9,400 1.88 18,800 1.88Utilities 1,400 0.28 2,300 0.23Rent 4,000 0.80 4,000 0.40Maintenance 800 0.16 1,200 0.12Supervisory salaries 1,000 0.20 1,000 0.10InstructionsDefine the terms variable costs, Fixed costs, and mixed costsVariable costs are costs which change when the based upon the amount of a product produced. Fixed Costs are costs which stay the same all the time, and Mixed costs are costs which stay the same most of the time, but every now and then have variances. Classify each cost above as either variable, fixed or mixed. Direct materials: Variable Direct labor : VariableUtilities: MixedRent: Fixed Maintenance: Mixed Supervisory salaries: Fixed E5-9 Regional Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes