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 1,600 tons of ore were extracted:

Straight-line depreciation	$	38,000
Charitable contributions*		11,000
Mining labor/fringe benefits		312,000
Royalties		139,000
Trucking and hauling		311,405

*Incurred only in December.

Peak activity of 2,900 tons occurred in June, resulting in mining labor/fringe benefit costs of $565,500, royalties of $217,000, and trucking and hauling outlays of $406,405. The trucking and hauling outlays exhibit the following behavior:

Less than 1,600 tons	$	263,905
From 1,6002,099 tons		311,405
From 2,1002,599 tons		358,905
From 2,6003,099 tons		406,405

Antioch uses the high-low method to analyze costs.

Required:

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

2. 2. Calculate the total cost for next February when 1,900 tons are expected to be extracted.

3. 3-a. Is hauling 1,600 tons with respect to Antiochs trucking/hauling cost behavior cost-effective?

4. 3-b. Given the current scenario at what number of tons can cost-effectiveness be achieved?

5. 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?

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