Creating and Using a Cost Formula

Limone Motors manufactures hybrid sports utility vehicles $($SUVs$).$ Limone incurs monthly depreciation costs of $$25,000,000$ on its highly

automated plant machinery and warehousing facility. Also, each SUV requires materials and manufacturing overhead resources. On average,

the company uses $37,500,000$ pounds of aluminum to manufacture $75,000$ SUVs per month. Each pound of aluminum costs $$1\mathrm{.}20.$ In addition,

manufacturing overhead resources are driven by machine hours. On average, the company incurs $$750,000,000$ of variable manufacturing

overhead resources to produce $75,000$ SUVs per month.

Required:

Create a formula for the monthly cost of SUVs for Limone.

Total Cost $of$ SUVs $=$ Fixed cost $+(Variable$ rate $$ Number $of$ SUVs$)$

Total Cost $of$ SUVs $=s,+($$$|$ Number $of$ SUVs$)$

If Limone expects to manufacture $60,000$ SUVs next month, what is the expected fixed cost $($assuming that $60,000$ units is within the

company's current relevant range$)?$

$

What is the total variable cost $($assuming that $60,000$ units is within the company's current relevant range$)?$

$

$x$

What is the total manufacturing cost $($i$.$e$.,$ both fixed and variable$)($assuming that $60,000$ units is within the company's current relevant

range$)?$

$

$x$