Coastal Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Coastal has the following manufacturing costs Click the icon to view the manufacturing costs.) Coastal currently produces 170 vehicles per month. Data table Plant management costs, $1,464,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, S600 per Surfer vehicle produced Direct materials costs: Steel, 51,400 per Surfer, Tires, 100 per tire, each Surfer takes 5 tires (one spare) City license, which is charged monthly based on the number of tires used in production: 0-500 tires $ 60,000 501-1,000 tires $ 65,000 more than 1,000 tires $ 210,000 1. Requirements What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? 2. Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graphs? Explain. 3. What is the total manufacturing cost of each vehicle if 85 vehicles are produced each month? 210 vehicles? How do you explain the difference in the manufacturing cost per unit? Determine the fixed manufacturing cost per month at each of the following capacity levels. 0-500 tires per month 501-1,000 tires per month more than 1,000 tires per month Coastal Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Coastal has the following manufacturing costs Click the icon to view the manufacturing costs.) Coastal currently produces 170 vehicles per month. Data table Plant management costs, $1,464,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, S600 per Surfer vehicle produced Direct materials costs: Steel, 51,400 per Surfer, Tires, 100 per tire, each Surfer takes 5 tires (one spare) City license, which is charged monthly based on the number of tires used in production: 0-500 tires $ 60,000 501-1,000 tires $ 65,000 more than 1,000 tires $ 210,000 1. Requirements What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? 2. Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graphs? Explain. 3. What is the total manufacturing cost of each vehicle if 85 vehicles are produced each month? 210 vehicles? How do you explain the difference in the manufacturing cost per unit? Determine the fixed manufacturing cost per month at each of the following capacity levels. 0-500 tires per month 501-1,000 tires per month more than 1,000 tires per month
