Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i need help with the fixed unit cost per vehicle for requirement 3. Consolidated Motors specializes in producing one specialty vehicle. It is called Surfer

image text in transcribed
image text in transcribedi need help with the fixed unit cost per vehicle for requirement 3.
Consolidated Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Consolidated has the following manufacturing costs: (Click the icon to view the manufacturing costs.) Consolidated currently produces 170 vehicles per month. Requirements 1. What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? 2. Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graphs? Explain. 3. What is the total manufacturing cost of each vehicle if 80 vehicles are produced each month? 205 vehicles? How do you explain the difference in the manufacturing cost per unit? $400,000 $400,000 $300,000 $200,000 $200,000 $100,0001 $100,000 $0+ 0 500 1.0001,500 0 500 1.0001,500 Tires Used in Production Tires Used in Production $300,000 $400,000 $300,000 $200,0001 $100,000 $0+ 0 500 10001,500 Tires Used in Production Total Fixed $400,000 $300,000 $200,000 $100,000 SOH 6 500 1.0001,500 Tires Used in Production Total Fixed C $0-1 How does the concept of relevant range relate to your graphs? Explain. The concept of relevant range is potentially relevant for both graphs. The question does not place restrictions on the unit variable costs. The relevant range for the total fixed costs is from 0 to 500 tires; 501 to 1000 tires; more than 1000 tires, and so on. Within these ranges, the total fixed costs do not change in total. Requirement 3. What is the total manufacturing cost of each vehicle if 80 vehicles are produced each month? 205 vehicles? How do you explain the difference in the manufacturing cost per unit? Calculate the manufacturing cost of each vehicle (a) if 80 vehicles are produced each month and (b) if 205 vehicles are produced each month. (Round your answers to the nearest cent.) Vehicles Fixed unit Variable unit Total unit cost per vehicle cost per vehicle cost per vehicle (a) 80 2,950.00 $ 7,538.00 (b) 205 2.950.00 $ 5,764.00 per month 1 0 Data Table X Plant management costs, $1,992,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, $800 per Surfer vehicle produced Direct materials costs: Steel, $1,400 per Surfer; Tires, $150 per tire, each Surfer takes 5 tires (one spare) City license, which is charged monthly based on the number of tires used in production: 0-500 tires $ 40,040 501-1,000 tires $ 65,000 more than 1,000 tires $ 249,870

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_2

Step: 3

blur-text-image_3

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

Auditing And Assurance Services

Authors: William Messier, Steven Glover, Douglas Prawitt

6th International Edition

0071284664, 978-0071284660

More Books

Students also viewed these Accounting questions