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 01,600 units, and monthly production costs for the production of 1,100 units follow. Morning Doves utilities and maintenance costs are mixed with the fixed components shown in parentheses.

Production Costs Total Cost
Direct materials $ 1,500
Direct labor 7,900
Utilities ($130 fixed) 630
Supervisors salary 2,600
Maintenance ($310 fixed) 460
Depreciation 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.) 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.) 3. State Morning Doves linear cost equation for a production level of 01,600 units. Enter answer as an equation in the form of y = a + bx. (Round your variable cost per unit to 2 decimal places.) 4. Calculate Morning Doves expected total cost if production increased to 1,300 units per month. Enter answer as an equation in the form of y = a + bx. (Round Variable cost per unit to 2 decimal places.)

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

Audit Culture How Indicators And Rankings Are Reshaping The World

Authors: Cris Shore, Susan Wright

1st Edition

0745336450, 978-0745336459

More Books

Students also viewed these Accounting questions