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Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December,

Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when 1,150 tons of ore were extracted:

Straight-line depreciation$24,500

Charitable contributions*6,500

Mining labor/fringe benefits172,500

Royalties150,250

Trucking and hauling177,205

*Incurred only in December.

Peak activity of 2,450 tons occurred in June, resulting in mining labor/fringe benefit costs of $367,500, royalties of $286,750, and trucking and hauling outlays of $222,205. The trucking and hauling outlays exhibit the following behavior:

Less than 1,150 tons$154,705

From 1,150-1,649 tons177,205

From 1,650-2,149 tons199,705

From 2,150-2,649 tons222,205

Antioch uses the high-low method to analyze costs.

a)Calculate the total cost for next February when 1,450 tons are expected to be extracted.

3-b.If the company plans to extract 1,150 tons, at what number of tons can cost-effectiveness be achieved?

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