Big Thumbs Company _Fixed & Variable costs

QUESTION

Big
Thumbs Company manufactures portable flash drives for computers. Big Thumbs incurs
monthly depreciation costs of $15,900 on its plant equipment. Also, each drive
requires materials and manufacturing overhead resources. On average, the
company uses 18,500 ounces of materials to manufacture 7,400 flash drives per
month. Each ounce of material costs $3.00. In addition, manufacturing overhead
resources are driven by machine hours. On average, the company incurs $29,600
of variable manufacturing overhead resources to produce 7,400 flash drives per
month.
Total cost of flash drives
= $____ + ($_____ x Number of flash drives)
2. If the department expects to manufacture 6,000 flash drives next
month, what is the expected fixed cost (assume that 6,000 units is within the
company’s current relevant range)?
What is the total variable
cost (assume that 6,000 units is within the company’s current relevant range)?

What is the total
manufacturing cost (i.e., both fixed and variable) (assume that 6,000 units is
within the company’s current relevant range)?

ANSWER:

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