Cost Behavior

SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $580,880 + $1.29X, where X equals number of smokers. Last year, SmokeCity produced 21,200 smokers. Actual overhead costs for the year were as expected.

Required:

1. What is the driver for the overhead activity?

For questions 2-4, Enter the final answers rounded to the nearest dollar.

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

$fill in the blank 2

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

$fill in the blank 3

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

$fill in the blank 4

For questions 5-7, round your answers to the nearest cent. Use those rounded figures in subsequent computations, if necessary.

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) 20,500 units and (b) 22,600 units. Round your answers to the nearest cent.

	20,500 Units	22,600 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: