Anchor Calendar Company Manufactures Wall and Desktop Calendars for Business

question 32

Essay

Anchor Calendar Company manufactures wall and desktop calendars for business use.The company expects production of 20,000 units this year.Various costs and items associated with calendar production are described below: $$\begin{array} { | l | l | l | l | l | } \hline \text { Item } & \text { Direct } & \text { Indirect } & \text { Fised } & \text { Variable } \\\hline \text { Purchase cost of paper } & & & & \\\hline \text { Assembly labor costs } & & & & \\\hline \text { Supervisory labor costs } & & & & \\\hline \begin{array} { l } \text { Depreciation on paper cutting } \\\text { machines }\end{array} & & & & \\\hline \text { Depreciation on factory building } & & & & \\\hline \begin{array} { l } \text { Maintenance on machines } \\\text { (performed between batches of } \\\text { products) }\end{array} & & & & \\\hline \begin{array} { l } \text { Materials used in small amount, } \\\text { such as glue }\end{array} & & & & \\\hline \text { Factory rental costs } & & & & \\\hline\end{array}$$ Required: Assume that management is interested in determining the average cost per calendar.For each item in the table,place a check mark or X in every column that applies.When labeling costs as fixed or variable,select your response on the basis of whether the total cost of that item will change when changes occur in volume of calendars produced.

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Definitions:

Total Revenue Schedule

A table or graph that shows the total revenue a firm can expect to receive at various levels of output, assuming a constant price.

Demand Linear

A relationship in economics where the amount of a good or service demanded changes linearly with its price.

Marginal Revenue

The rise in income generated by the sale of an extra product or service unit.

Total Revenue

The sum of all revenue a business earns from its operational activities, like goods sales or service provision, prior to expense deduction.