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I need help with this problem, & can you explain to me how you got the answer 103 CH3#27-30,35-6,43-4 eBook Show Me How Creating and
I need help with this problem, & can you explain to me how you got the answer
103 CH3#27-30,35-6,43-4 eBook Show Me How 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 $1.20. 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: 1. Create a formula for the monthly cost of SUVs for Limone. Total Cost of SUVs Fixed cost + (Variable rate x Number of SUVs) Total Cost of SUVs = $ 25,000,000 + ($ x Number of SUVs) 2. 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)? $ 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)? $Step by Step Solution
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