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 1,050 tons of ore were extracted:

Straight-line depreciation	$	21,500
Charitable contributions*		5,500
Mining labor/fringe benefits		147,000
Royalties		147,250
Trucking and hauling		155,215

*Incurred only in December. Peak activity of 2,350 tons occurred in June, resulting in mining labor/fringe benefit costs of $329,000, royalties of $296,750, and trucking and hauling outlays of $190,215. The trucking and hauling outlays exhibit the following behavior:

Less than 1,050 tons	$	137,715
From 1,0501,549 tons		155,215
From 1,5502,049 tons		172,715
From 2,0502,549 tons		190,215

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. 2. Calculate the total cost for next February when 1,350 tons are expected to be extracted. 3-a. Is hauling 1,050 tons with respect to Antiochs trucking/hauling cost behavior cost-effective? 3-b. If the company plans to extract 1,050 tons, at what number of tons can cost-effectiveness be achieved? 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? 5. Speculate as to why the companys charitable contribution cost arises only in December.

Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or semivariable.

a.	Straight-line depreciation
b.	Charitable contributions
c.	Mining labor/fringe benefits
d.	Royalties
e.	Trucking and hauling

Calculate the total cost for next February when 1,350 tons are expected to be extracted.

Total cost

Is hauling 1,050 tons with respect to Antiochs trucking/hauling cost behavior cost-effective?

	Yesradio button unchecked1 of 2 No

If the company plans to extract 1,050 tons, at what number of tons can cost-effectiveness be achieved?

Number of tons

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?

	Discretionary fixed costsradio button unchecked1 of 2 Commited fixed costs

Speculate as to why the companys charitable contribution cost arises only in December.

	To demonstrate social responsibilityradio button unchecked1 of 3 To claim tax deductionradio button unchecked2 of 3 To promote businessradio button unchecked3 of 3