Sunshine Valley Meat Company produces one of the best sausage products in Pennsylvania.The company's controller compiled the following information by analyzing the accounting records:
1.Meat costs the company $3.25 per pound of sausage produced.
2.Compensation of production employees is $2.25 per pound of sausage produced.
3.Supervisory salaries total $23,000 per month.
4.The company incurs utility costs of $9,000 per month plus $0.35 per pound of sausage produced.
5.Insurance and property taxes average $6,400 per month.
Required:
A.1.Variable
2.Variable
3.Fixed
4.Semivariable
5.Fixed
A.Classify each cost as variable,fixed,or semivariable.
B.
B.Write a formula to express the behavior of the firm's production costs.(Use the form Y = a + bX,where X denotes the quantity of sausage produceD. )
Correct Answer:
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2.Varia...
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