NAME OF THE COST VARIABLE FIXED PRODUCT COST PERIOD COST OPPORTUNNITY SUNK COST

COST COST COST

DIRECT DIRECT LABOR MANUFACTURING
MATERIALS OVERHEAD

Rental revenue forgone, 30,000 per year X

Direct Materials Cost, $80 per unit X X

Rental cost of warehouse, $500 per month
Rental cost of equipment, $4000 per month
Direct labor cost, $60 per unit
Depreciation of the annex space $8000 per year
Advertising Cost 50,000 per year
Electricity for machines, 1.20 per unit
Supervisor,s salary $1500 per month
Shipping Cost, $9 per unit
Return earned on investments $3000 per year
X X
X X
X X
X X X
X X
X X
X X
X X
X
PROBLEM 2

St. Ives Corp. has collected the following data concerning its maintenance costs for
the past six months.

Units Produced Total Cost

July 18,000 P32,000
August 32,000 48,000
September 36,000 55,000
October 22,000 38,000
November 40,000 66,100
December 38,000 62,000

Instruction:
Compute the variable and fixed-cost elements using the high-low method.

HIGH LOW METHOD:

Variable Per Cost Unit= 66,100- 32,000 =1.55

40,000-18,000

High Activity Cost:

Fixed Cost: 66,100-( 1.55 x 40,000) = 4,100

Low Activity Cost: