Sugarsweet Confections Inc

Essay

Sugarsweet Confections Inc. produces one of the best brands of all natural jam in Ontario. The following information was obtained through an analysis of the accounting records:
1. Raw materials and packaging (strawberries and sugar) cost the company $5.00 per jar produced.
2. Compensation of production employees is $6.00 per jar produced.
3. Supervisory salaries total $33,000 per month.
4. The company incurs utility costs of $8,000 per month plus $0.50 per jar produced.
5. Insurance and property taxes average $7,000 per month.
Required:
A. Classify each cost as variable, fixed, or semi-variable.
B. Write a formula to express the behaviour of the firm's production costs. (Use the form Y = a + bX, where X denotes the quantity of jam produced.)