Question

Closet Links Clothing Company provided the following manufacturing costs for the month of June. Direct labor cost $ 130,000 Direct materials cost 86,000 Equipment depreciation ​(straightminus​line) 23,000 Factory insurance 15,000 Factory​ manager's salary 12,600 ​Janitor's salary 3,000 Packaging costs 19,600 Property taxes 16,000 From the above​ information, calculate Closet​ Link's total variable costs.

Answer 1

Answer:

$235,600

Explanation:

Variable costs refer to corporate expenses that change in proportion with the output of a production process. These costs may either increase or decrease based on a company's production volume; they rise as production increases and fall as production decreases. In our case, they include direct material cost, direct labor cost, and packaging cost.

Closet​ Link's total variable costs

= Direct material cost +  Direct labor cost + packaging cost

= $86,000 + $130,000 + $19,600

= $235,600