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JFK Bay Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back
JFK Bay Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. JFK Bay has the following manufacturing costs for 2022: Plant management costs, $1,200,000 per year Cost of leasing equipment, $1,800,000 per year Workers' wages, S500 per Surfer vehicle produced Direct materials costs: Steel, $1,000 per Surfer; Tires, $200 per tire, each Surfer takes 5 tires (one spare). Boston City license, which is charged monthly based on the number of tires used in production: 0-500 tires o 501-1,000 tires o more than 1,000 tires $50,000 $70,000 $200,000 JFK Bay currently produces 150 vehicles per month. (Show all your work to receive full credits.) a. What is the variable manufacturing cost per vehicle? b. What is the fixed manufacturing cost per month? (Question 1 continued) c. What is the total manufacturing cost of each vehicle if 100 vehicles are produced each month? 500 vehicles? How do you explain the difference in the manufacturing cost per unit (briefly)?
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Solution Calculation of Variable Cost per unit Steel 1000 Tire 200 x 5 tires per vehicle 1000 Wages 500 Cost of License 0 500 tires 50000 Cost per uni...Get Instant Access to Expert-Tailored Solutions
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