Lone Mountain Extraction, which mines ore in Idaho, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when 1,950 tons of ore were extracted:

Straight-line depreciation	$	48,500
Charitable contributions*		14,500
Mining labor/fringe benefits		448,500
Royalties		102,250
Trucking and hauling		437,370

*Incurred only in December.

Peak activity of 3,250 tons occurred in June, resulting in mining labor/fringe benefit costs of $747,500, royalties of $134,750, and trucking and hauling outlays of $567,370. The trucking and hauling outlays exhibit the following behavior:

Less than 1,950 tons	$	372,370
From 1,9502,449 tons		437,370
From 2,4502,949 tons		502,370
From 2,9503,449 tons		567,370

Lone Mountain Extraction uses the high-low method to analyze costs.

Required:

1.

Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or semivariable.

A. Straight line depreciation ?

B. Charitable contributions ?

C. Mining labor/Fringe ?

D. Royalties ?

E. Trucking and hauling ?

Calculate the total cost for next February when 2,250 tons are expected to be extracted

3-b.	Given the current scenario at what number of units cost effectiveness can be achieved?