Chapter s Cost Behavior CORNERSTONE EXERCISES Cornerstone Exercise 3-15 Creating and Using a Cost Formula Big Thumbs Company manufactures portable flash drives for computers. Big Thumbs i monthly depreciation costs of $15,000 on its plant equipment. Also, each drive requires als and materi- or 1 ounces addition, manufacturing overhead resources are driven by machine hours. On average, the com. pany incurs $22,500 of variable manufacturing overhead resources to produce 5,000 flash drives manufacturing overhead resources. On average, the company uses 10,000 ou materials to manufacture 5,000 flash drives per month. Each ounce of material costs $3.00, I per month. Required I. Create a formula for the monthly cost of flash drives for Big Thumbs. 2. If the department expects to manufacture 6,000 flash drives next month, what is the expected fixed cost (assume that 6,000 units is within the company's current relevant ran Total variable cost? Total manufacturing cost (i.e., both fixed and variable)? se the folowing information for Cornerstone Exercises 3-16 through 3-19 izza Vesuvio makes specialty pizzas. Data for the past eight months were collected: Month Labor Cost January February March April May June $ 7,000 8,140 9.899 9,787 8,490 7,450 9,490 7,531 Employee Hours 360 550 630 610 480 350 570 310 July August