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Evening Dove Company manufactures one model of birdbath, which is very popular. Evening Dove sells all units it produces each month. The relevant range is
Evening Dove Company manufactures one model of birdbath, which is very popular. Evening Dove sells all units it produces each month. The relevant range is 0-1,800 units, and monthly production costs for the production of 1,400 units follow. Evening Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costa Total Cost Direct materials $ 2,500 Direct labor 7,300 Utilities ($120 600 fixed) Supervisor's salary 2,600 Maintenance ($270 490 fixed) Depreciation 900 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). Behaviors Rate Rate Per unit Per month Production Costs Direct Materials Direct Labor Utilities Supervisor's Salary Maintenence Depreciation Per unit Per unit Per unit Per month Per month Per month Per unit Per unit Per Month Per month 2. Determine the total fixed cost per month and the variable cost per unit for Evening Dove. 3. State Evening Dove's linear cost equation for a production level of 0-1,800 units. Enter answer as an equation in the form of y = a + bx. 4. Calculate Evening 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
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