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PCB Corporation manufactures a single product. Monthly production
costs incurred in the manufacturing process are shown below for the
production of 3,000 units. The utilities and maintenance costs are mixed
costs. The fixed portions of these costs are $300 and $200, respectively.
Instructions
A. Identify the above costs as variable, fixed, or mixed.
B. Calculate the expected costs when production is 5,000 units.
E5-9
The Palmer Acres Inn is trying to determine its break-even point during
its off-peak season. The inn has 50 rooms that it rents at $60 a night.
Operating costs are as follows.
Salaries $5,900 per month FIXED COST
Utilities $1,100 per month FIXED COST
Depreciation $1,000 per month FIXED COST
Maintenance $100 per month Maid service $14 per room VARIABLE
Other costs $28 per room VARIABLE
FIXED COST
Instructions: Determine the inn's break-even point in
(a) number of rented rooms per month and
(b) dollars.