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Ross Company Has the Following Information Available Regarding Costs at Various

Question 115

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Ross Company has the following information available regarding costs at various levels of monthly production:
 Production volume 7,00010,000 Direct materials $70,000$100,000 Direct labour 56,00080,000 Indirect materials 21,00030,000 Supervisors’ salaries 12,00012,000 Depreciation on plant and equipment 10,00010,000 Maintenance 32,00044,000 Utilities 15,00021,000 Insurance on plant and equipment 1,6001,600 Property taxes on plant and equipment 2,0002,000 Total $219,600$300,600\begin{array}{lrr}\text { Production volume }&\underline{\underline{7,000}}&\underline{\underline{10,000}}\\\\ \text { Direct materials } & \$ 70,000 & \$ 100,000 \\\text { Direct labour } & 56,000 & 80,000 \\\text { Indirect materials } & 21,000 & 30,000 \\\text { Supervisors' salaries } & 12,000 & 12,000 \\\text { Depreciation on plant and equipment } & 10,000 & 10,000 \\\text { Maintenance } & 32,000 & 44,000 \\\text { Utilities } & 15,000 & 21,000 \\\text { Insurance on plant and equipment } & 1,600 & 1,600 \\\text { Property taxes on plant and equipment } &\underline{ 2,000 }&\underline{ 2,000} \\\quad \text { Total } &\underline{ \$ 219,600} &\underline{ \$ 300,600}\end{array}
a.Identify each cost as being variable,fixed,or mixed by writing the name of each cost under one of the following headings:
Variable Costs Fixed Costs Mixed Costs
b.Develop an equation for total monthly production costs.
c.Predict total costs for a monthly production volume of 8,000 units.

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a.
b.Variable costs = ($300,600 - $219...

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