1. Cost Behavior

   Fresh Powder, Inc., manufactures snowboards. Based on past experience, Fresh Powder has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $2,500,000 + $125X, where X equals number of snowboards. Last year, Fresh Powder produced 50,000 snowboards. Actual overhead costs for the year were as expected.

   Required:

   1. What is the driver for the overhead activity?

   Number of labor hoursNumber of ordersNumber of snowboardsUnits soldNumber of snowboards

   2. What is the total overhead cost incurred by Fresh Powder last year?

   $fill in the blank 2

   3. What is the total fixed overhead cost incurred by Fresh Powder last year?

   $fill in the blank 3

   4. What is the total variable overhead cost incurred by Fresh Powder last year?

   $fill in the blank 4

   5. What is the overhead cost per unit produced?

   $fill in the blank 5 per unit

   6. What is the fixed overhead cost per unit?

   $fill in the blank 6 per unit

   7. What is the variable overhead cost per unit?

   $fill in the blank 7 per unit

   8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 49,000 units and (b) 52,000 units. (Round your answers to the nearest cent.)

   	49,000 Units	52,000 Units
   Unit cost	$fill in the blank 8	$fill in the blank 9
   Unit fixed cost	fill in the blank 10	fill in the blank 11
   Unit variable cost	fill in the blank 12	fill in the blank 13

   The reason the unit costs changed in the way they did is because:

   the relevant range has increasedthe total fixed costs are increasingthe fixed costs are being spread over the different levels of production.the unit variable cost is dropping as production rises