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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 0-1,800 units, and monthly production costs for the production of 1,300 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($110 fixed) Supervisor's salary Maintenance ($320 fixed) Depreciation Total Cost $ 2,300 6,900 550 3,100 470 800 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 Direct Materials Variable Direct labor Variable Utilities Mixed Supervisor's Salary Fixed Maintenance Mixed Depreciation Fixed Rate $ 1.77 per Unit $ 5.31 per Unit $ 0.34 per Unit $ 13 100 per Unit $ 0.16 per Unit $ 800.00 per Unit per Month per Month per Month per Month per Month per Month 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 0-1,800 units. Enter answer as an equation in the form of y = a + bx. (Round your variable cost per unit to 2 decimal places.) Total Cost = + L x 4. Calculate Morning Dove's expected total cost if production increased to 1,500 units per month. Enter answer as an equation in the form of y = a + bx. (Round Variable cost per unit to 2 decimal places.)
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