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a. Variable costs: A cost that varies with the level of production or sales, known as variable cost.
Total variable cost increase or decrease in the proportion of sales or production units, that's why
the variable cost per unit always remains same in each level of output.
Fixed costs: A cost that does not change in the proportion of output, is known as fixed cost.
Total fixed cost always remains constant, but fixed cost per unit increases if the output
decreases and decreases if the output increases.
Mixed costs: A cost that contains variable and fixed (both) components, is known as mixed cost.
Neither total mixed cost nor unit mixed cost remains constant on each level of production.
b. Variable costs: Direct materials, Direct labor
Fixed costs: Rent, Supervisory salaries
Mixed costs: Utilities, Maintenance
E22.4
Variable: 1, 2, 4, 6, 9
Fixed: 3, 5, 7, 8, 10
Mixed: 11, 12
E22.6
b.
Cost to produce 5000 units: 5800 + (10.9 * 5000) = 5800 + 54500 = $60300