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Cost Behavior Alisha Incorporated manufactures medical stents for use in heart bypass surgery. Based on past experience, Alisha has found that its total maintenance costs
Cost Behavior Alisha Incorporated manufactures medical stents for use in heart bypass surgery. Based on past experience, Alisha has found that its total maintenance costs can be represented by the following formula: Maintenance Cost = $1,875,000 + $225x, where X = Number of Heart Stents. Last year, Alisha produced 47,000 stents. Actual maintenance costs for the year were as expected. Required: If required, round your answers to the nearest cent. 1. What is the total maintenance cost incurred by Alisha last year? 2. What is the total fixed maintenance cost incurred by Alisha last year? 3. What is the total variable maintenance cost incurred by Alisha last year? 4. What is the maintenance cost per unit produced? $ per unit 5. What is the fixed maintenance cost per unit? $ per unit 6. What is the variable maintenance cost per unit? $ per unit Classifying Costs as Fixed and Variable in a Service Organization Alva Community Hospital has five laboratory technicians who are responsible for doing a series of standard blood tests. Each technician is paid a salary of $40,000. The lab facility represents a recent addition to the hospital and cost $325,000. It is expected to last 20 years. Equipment used for the testing cost $10,000 and has a life expectancy of 5 years. In addition to the salaries, facility, and equipment, Alva expects to spend $200,000 for chemicals, forms, power, and other supplies. This $200,000 is enough for 200,000 blood tests. Required: Assuming that the driver (measure of output) for each type of cost is the number of blood tests run, classify each cost as a variable cost, discretionary fixed cost, or committed fixed cost. Technician salaries Laboratory facility Variable cost Laboratory equipment Discretionary fixed cost Chemicals and other supplies Committed fixed cost
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