Question

Question 5 (1 point) Mama Italiano Sauce is in the process of preparing a production cost budget for May. The actual costs in April were: Mama Italian Sauce Production Cost Budget April 2008 Production - Jars of sauce 20,000 Ingredient cost (variable) $16.000 Labor cost (variable) 9.000 Rent (fixed) 4.000 Depreciation (fixed) 6,000 1,000 Other (fixed) Total $36.000

Answer 1

In the photo, we can see that there are only two costs which are variable; 1)ingredient cost 2)labour cost .

22,500 $ 18,000 (0.88 22 500 F23.000 20,000 Budget for May loot April xoo Production 20,000 D Ingredient Cost $ 16,000 perunt ( 16.01 20:2) ② Labour Cast (varuokk) $9,000 per unit (9.00 - Ous) ② Rent (fixed) $4,000 ② Depreciation (exed) $6,000 ③ Other (fixed) $1,000 T Total $36,000 $ 10, 125 (0.452250051095) $ 4,0vo $6,000 $1,000 Total $39,125 Total amount for May budget = 1839,25)

In case of both the variable cost, we find the per unit cost and multiply it by production capacity of May in order to find the variable cost for May. And rest of the costs are fixed so we just add it to variable cost in order to get the total cost for May.