[MichelleEm]

Mozena Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 4,080 units. The utilities and maintenance costs are mixed costs.The fixed portions of these costs are $408 and $272, respectively.

Production in Units
4,080

Production Costs

Direct Materials $10,200
Direct labor 20,400
Utilities 2,448
Property taxes 1,360
Indirect labor 6,120
Supervisory salaries 2,448
Maintenance 1,496
Depreciation 3,264


Calculate the expected costs when production is 6,800 units.

[paraclete]

Well go to it

[MichelleEm]

I do not understand how to find the expected costs... I have tried multiple things and nothing seems to get me the correct answer..

[paraclete]

What you have to do is decide which costs vary with volume and which costs remain static irrespective of volume. I see four items which may vary with volume and four which might not. Given the lack of detail this exercise is highly subjective and what they are looking for is you to apply certain principles both in accounting and in logic. What I don't know is which costing methodology you are studying and this may affect the way the model answer is formulated. Show me your work thus far

[MichelleEm]

The formula I am going to try now, which I do not know if it will work is:

Total Cost= Fixed Costs + (Variable Costs per unit * Units)

[paraclete]

The formula I am going to try now, which I do not know if it will work is:

Total Cost= Fixed Costs + (Variable Costs per unit * Units)

Yes that would seem appropriate