Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and Problem 6-37 Cost Behavior and Analysis, 1,500 tons of ore were extracted: High-Low Method (10,62,64,65) 2. Tatal cost for 1,650 tans: 5823,500 Peak activity of 2,600 tons occurred in June, resulting in mining labondfringe benefit coots of $598,000, royalties of $201,000, and trucking and hauling outlays of $325,000. The trucking and hauling outlays exhibit the following behavior: Less than 1,500 tons Ftom 1,500-1,899 tons Fiom 1,900-2,299 tons Fiom 2,300-2,699 tons. $250,000 275,000 300,000 325,000 Antioch uses the high-low method to analyze costs. Required: 1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or semivariable. Shcw calculations to support your answers for mining labor/fringe benefits and royalties. 2. Calculate the total cost for next February when 1,650 tons are expected to be extracted. 3. Comment on the cost-effectiveness of hauling 1,500 tons with respect to Antioch's trucking/hauling cost behavior. Can the company's effectiveness be improved? How? 4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe economic difficulties, which of the two types of fixed costs should management try to cut? Why? 5. Speculate as to why the company's charitable contribution cost arises only in December- Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and Problem 6-37 Cost Behavior and Analysis, 1,500 tons of ore were extracted: High-Low Method (10,62,64,65) 2. Tatal cost for 1,650 tans: 5823,500 Peak activity of 2,600 tons occurred in June, resulting in mining labondfringe benefit coots of $598,000, royalties of $201,000, and trucking and hauling outlays of $325,000. The trucking and hauling outlays exhibit the following behavior: Less than 1,500 tons Ftom 1,500-1,899 tons Fiom 1,900-2,299 tons Fiom 2,300-2,699 tons. $250,000 275,000 300,000 325,000 Antioch uses the high-low method to analyze costs. Required: 1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or semivariable. Shcw calculations to support your answers for mining labor/fringe benefits and royalties. 2. Calculate the total cost for next February when 1,650 tons are expected to be extracted. 3. Comment on the cost-effectiveness of hauling 1,500 tons with respect to Antioch's trucking/hauling cost behavior. Can the company's effectiveness be improved? How? 4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe economic difficulties, which of the two types of fixed costs should management try to cut? Why? 5. Speculate as to why the company's charitable contribution cost arises only in December
