Question

Adams Manufacturings five manufacturing departments had the following operating and cost information for the two most recent months of activity: May June Units produced 10,000 20,000 Costs in each department Department A Department B Department C Department D Department E $10,000 $10,000 25.000 50,000 35,000 45,000 18,000 64,000 22,000 44,000 Required Identify whether the cost in each department is fixed, variable, or mixed Fixed, Variable Mixed Costs or Departments

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Answer #1
Departments Fixed, Variable or Mixed Costs
A Fixed
B Variable
C Mixed
D Mixed
E Variable

Explanations:

A: The costs are fixed since they do not change with a change in the volume of units produced.

B and E: The costs are variable since they change in proportion to the number of units produced.

C and D: The costs are mixed since the change is not proportional to the change in the number of units produced.

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