Question 1 - Monthly production costs in Pesavento Company for two levels of production are as follows.
Cost 3,000 units 6,000 units
Indirect labor $10,000 $20,000
Supervisory salaries 5,000 5,000
Maintenance 4,000 7,000
Indicate which costs are variable, fixed, and mixed, and give the reason for each answer.
Question 2 - Bruno Manufacturing Inc. had sales of $2,200,000 for the first quarter of 2010. In making the sales, the company incurred the following costs and expenses.
Variable Fixed
Cost of goods sold $920,000 $440,000
Selling expenses 70,000 45,000
Administrative expenses 86,000 98,000
Prepare a CVP income statement for the quarter ended March 31, 2010.