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Fowler Company 5000

Price: $1.99


Fowler Company manufactures a single product. Annual production costs incurred
in the manufacturing process are shown below for two levels of production.


  Cost Incurred
Production in Units                                  5,000                                  10,000
Production Costs  Total Cost  Cost /Unit  Total Cost  Cost /Unit 
Direct materials  $8,250  1.65  16,500  1.65
Direct labor  9,400  1.88  18,800  1.88
Utilities  1,400  0.28  2,300  0.23
Rent  4,000  0.80  4,000  0.40
Maintenance  800  1.60  1,200  0.12
Supervisory salaries  1,000  0.20  1,000  0.10

Instructions
(a) Define the terms variable costs, fixed costs, and mixed costs.
(b) Classify each cost above as either variable, fixed, or mixed.

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