Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all...
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Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0 to 1,900 units, and monthly production costs for the production of 1,500 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($110 fixed) Supervisor's salary Maintenance ($260 fixed) Depreciation Total Cost $ 3,100 7,300 600 3,200 530 800 E5-4 (Algo) Determining Cost Behavior and Calculating Expected Cost [LO 5-1] Required: 1. Identify each cost as variable, fixed, or mixed, and express each cost as a rate per month or per unit (or combination thereof). 2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. 3. State Morning Dove's linear cost equation for a production level of 0 to1,900 units. Enter answer as an equation in the form of y = a + bx. 4. Calculate Morning Dove's expected total cost if production increased to 1,700 units per month. Enter answer as an equation in the form of y = a + bx. Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0 to 1,900 units, and monthly production costs for the production of 1,500 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($110 fixed) Supervisor's salary Maintenance ($260 fixed) Depreciation Total Cost $ 3,100 7,300 600 3,200 530 800 E5-4 (Algo) Determining Cost Behavior and Calculating Expected Cost [LO 5-1] Required: 1. Identify each cost as variable, fixed, or mixed, and express each cost as a rate per month or per unit (or combination thereof). 2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. 3. State Morning Dove's linear cost equation for a production level of 0 to1,900 units. Enter answer as an equation in the form of y = a + bx. 4. Calculate Morning Dove's expected total cost if production increased to 1,700 units per month. Enter answer as an equation in the form of y = a + bx.
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Related Book For
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
Posted Date:
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