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2. Rolling Hills Bistro produces one of the best sausage products in Tennessee. The company's controller compiled the following information by analyzing the accounting records:
2. Rolling Hills Bistro produces one of the best sausage products in Tennessee. The company's controller compiled the following information by analyzing the accounting records: 1. Meat costs the company $3.25 per pound of sausage produced. 2. Compensation of production employees is $2.25 per pound of sausage produced. 3. Supervisory salaries total $23,000 per month. 4. The company incurs utility costs of $9,000 per month plus $0.35 per pound of sausage produced. 5. Insurance and property taxes average $6,400 per month. Required: A. Classify each cost as variable, fixed, or semivariable. B. Write a formula to express the behavior of the firm's production costs. (Use the form Y= a +bX, where X denotes the quantity of sausage produced.)
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