Explain unit cost and total cost relationships. (Obj. 1). At the Open Door Company, factory supervision is a fixed cost of $10,000 per month.

a. Compute the supervision cost per direct labor hour at each of the following monthly activity levels:

(1) 10,000 hours

(2) 11,000 hours

(3) 12,500 hours

(4) 14,285 hours

b. What is the effect of increases in direct labor hours on the fixed cost per unit?

LO.1