Alberta Alloys, Inc., incurs a variable cost of $40 per pound for direct material to produce a special alloy Problem 2.60 used in manufacturing aircraft. Variable Costs;
Graphical and Tabular Required Analyses

a. Draw a graph of the firm’s direct material cost, showing the total cost at the following production (LO 4)
levels: 10,000 pounds, 20,000 pounds, and 30,000 pounds.

b. Prepare a table that shows the unit cost and total cost of direct material at the following production levels: 1 pound, 10 pounds, and 1,000 pounds.

•• Sky Comfort Corporation manufactures a special fabric used to upholster the seats in small aircraft. The Fixed Costs, Graphical company’s annual fixed production cost is $100,000.
and Tabular Analyses (LO 4) Required

a. Graph the company’s fixed production cost showing the total cost at the following production levels of upholstery fabric: 10,000 yards, 20,000 yards, 30,000 yards, and 40,000 yards.

b. Prepare a table that shows the unit cost and the total cost for the firm’s fixed production costs at the following production levels: 1 yard, 10 yards, 10,000 yards, and 40,000 yards.

c. Prepare a graph that shows the unit cost for the company’s fixed production cost at the following production levels: 10,000 yards, 20,000 yards, 30,000 yards, and 40,000 yards.