Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

E5-2 Determining Cost Behavior and Calculating Expected Cost [LO 5-1] Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells

image text in transcribedimage text in transcribed

E5-2 Determining Cost Behavior and Calculating Expected Cost [LO 5-1] Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 01,700 units, and monthly production costs for the production of 1,400 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($120 fixed) Supervisor's salary Maintenance ($330 fixed) Depreciation Total Cost $ 1,700 6,500 630 3,300 530 850 Required: 1. Identify each cost as variable, fixed, or mixed, and express each cost as a rate per month or per unit (or combination thereof). (Round your per unit value to 2 decimal places.) Production Costs Behavior Direct Materials per Month Rate per Unit per Unit per Unit Direct labor per Month Utilities per Month Supervisor's Salary per Unit per Month Maintenance per Unit per Month Depreciation per Unit per Month 2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. (Round your variable cost per unit to 2 decimal places.) Total Variable Cost per Unit Total Fixed Cost per Month 3. State Morning Dove's linear cost equation for a production level of 01,700 units. Enter answer as an equation in the form of y = a + bx. (Round your variable cost per unit to 2 decimal places.) Total Cost = + F 4. Calculate Morning Dove's expected total cost if production increased to 1,600 units per month. Enter answer as an equation in the form of y = a + bx. (Round Variable cost per unit to 2 decimal places.) + b X X =

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Barry Elliott, Jamie Elliott

20th Edition

1292399805, 978-1292399805

More Books

Students also viewed these Accounting questions

Question

Know how to find a consultant

Answered: 1 week ago