Creating and using a Cost Formula Big Thumbs Company manufactures portable flash drives for computer Hig Thumbs Incurs monthly depreciation costs of $16,000 on its plant equipment. Also, each drive requires materials and manufacturing overhead sources On average, the company uses 14,000 ounces of materials to manufacture 7,000 flash drives per month Each ounce of material costs $3.00. In addition, mang overhead resources are driven by machine hours. On average, the company incurs $42,000 of variable manufacturing overhead resources to produce 7.000 drives per month In your calculations, round variable rate per flash drive to the nearest cent. If required, round final answers to the nearest cent. Required: 1. Create a formula for the monthly cost of ash drives for Big Thumbs Total cost of Hash drives W Number of flash drives Total cost of flash drives + * Number of flash drives) 2. If the rtment expects to manufacture 6,000 flash drives next month, what is the expected fixed cost (assume that 6,000 units is within the company's current relevant range) What is the total variable cost (assume that 6,000 units is within the company's current relevant range? What is the total manufacturing cost (le, both fixed and ariable) (assume that 6.000 units is within the company's current relevant range) Using High-Low to Calculate Fixed Cost Calculate the Variable Rate, and construct a cost Function Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost($) Employee Hours January 9,690 February 7,200 380 440 March 7,731 460 April 8,340 350 May 9,987 410 June 8,690 320 July 11,564 520 August 7,700 290 Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with fabor used in the restaurant. In your calculations, round the variable rate per employee hour to the nearest cent. If required, round your final answers to the nearest cent Required: 1. Using the high-low method, calculate the fixed cost of tabor 2. Using the high-low method, calculate the variable rate. per employee hour February 7,200 440 March 7,731 460 April 8,340 350 May 9,987 410 June 8,690 320 July 11,564 520 290 August 7,700 Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with tabor used in the restaurant In your calculations, round the variable rate per employee hour to the nearest cent. If required, round your final answers to the Required: 1. Using the high-low method, calculate the fixed cost of labor. 2. Using the high-low method, calculate the variable rate. per employee hour 3. Using the high-low method, construct the cost formula for total labor cost Total labor costs +($ x Employee hours) Check My Work
