Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 01,900 units, and monthly production costs for the production of 1,400 units follow. Morning Doves utilities and maintenance costs are mixed with the fixed components shown in parentheses.

image text in transcribedimage text in transcribed

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 0-1,900 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 Total Cost 1,500 8,100 580 Direct materials Direct labor Utilities ($140 fixed) Supervisor's salary Maintenance ($300 fixed) Depreciation 3,000 470 850 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 Rate Variable Direct Materials per Month per Unit Variable Direct labor per Month per Unit Mixed Utilities per Month per Unit Supervisor's Salary Fixed per Month per Unit Mixed Maintenance per Month per Unit Depreciation Fixed per Month per Unit 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 0-1,900 units. Enter answer as an equation in the form of y abx. (Round your variable cost per unit to 2 decimal places.) Total Cost + 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 + = a 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

IT Auditing Using A System Perspective Premier Reference Source

Authors: Robert Elliot Davis

1st Edition

1799855481, 978-1799855484

More Books

Students also viewed these Accounting questions