Question

Tentacle Television Antenna Company provided the following manufacturing costs for the month of June. Direct labor cost Direct materials cost $140,000 83,000 Equipment depreciation (straight-line) Factory insurance Factory manager's salary Janitor's salary Packaging costs Property taxes 21,000 13,000 10,800 5,000 18,200 16,000 From the above information, calculate Tentacle's total fixed costs O A. $44,800 B. S60.800 OC. $65,800 OD, $307,000

Answer 1

Answer:

C. $65,800

Explanation:

Fixed csot: those which do not change for a relevant range with the production output. They aer constant.

Factory insurance                  21,000        

Factory insurance                  13,000

Factory manager's salary     10,800

Janitor's salary                        5,000

Property taxes:                      16,000  

    Total Fixed Cost:             65,800

The direct materials and direct labor are variable cost as they drop to zero if no unit is produced.

Same goes with packaging cost, if no unit is produced then, no packagin is needed.