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1. Identify each of the following costs for Hwang Company a producer of ski boats, as variable (V), fixed (F), or mixed (M):

costs for Hwang Company a producer of ski boats

1. Identify each of the following costs for Hwang Company, a producer of ski boats, as variable (V), fixed (F), or mixed (M):
aSalary of production manager 
bMaterials required for production 
cMonthly rent on factory building 
dHourly wages for assembly workers 
eStraight-line depreciation for factory equipment 
fAnnual insurance on factory building 
gSalaries and commissions of salespeople 
hSalary of chief executive officer 
iCompany cell phones with first 50 hours free, then 10 cents per minute 
jFabric required for production 
kSalary of controller (accounting) 
lElectricity for factory building 
3. How might the managers of these companies use the cost behavior information requested?
Answer here: 
Identifying Cost Behavior. Zhang Corporation is trying to identify the cost behavior of the three costs shown. Cost information is provided for six months.  [Note:  Use formulas in calculation cells to prevent rounding errors]
Required:
1. Calculate the cost per unit, and then identify how the cost behaves (fixed, variable, or mixed) for each of the three costs. Explain the reasoning behind your answers.
Cost 1Cost 2Cost 3
MonthUnits ProducedTotal CostsCost per UnitTotal CostsCost per UnitTotal CostsCost per UnitUnlocked Work Area:
118,000$36,000 $19,800 $5,000   
216,00032,000 19,200 5,000   
314,00028,000 18,200 5,000   
412,00024,000 16,800 5,000   
510,00020,000 14,500 5,000   
68,00016,000 12,000 5,000   
  
Cost Behavior     
  
Explain the reasoning behind your answers.     
  
2. Why is it important to identify how costs behave with changes in activity?  
  
Answer Here:     

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