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.

Production Costs Total Cost
Direct materials $ 1,900
Direct labor 7,700
Utilities ($130 fixed) 610
Supervisors salary 3,000
Maintenance ($320 fixed) 490
Depreciation 900

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.)

image text in transcribed

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.)

image text in transcribed

3. State Morning Doves linear cost equation for a production level of 01,900 units. Enter answer as an equation in the form of y = a + bx. (Round your variable cost per unit to 2 decimal places.) image text in transcribed 4. Calculate Morning Doves 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.) image text in transcribed

Production Costs Behavior Direct Materials Direct labor Utilities Supervisor's Salary Maintenance Depreciation Rate per Unit per Unit per Unit per Unit per Unit per Unit per Month per Month per Month per Month per Month per Month Total Cost =

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

Intermediate Accounting

Authors: kieso, weygandt and warfield.

IFRS Edition

978-1118443965, 1118800532, 9781118800539, 978-0470873991

More Books

Students also viewed these Accounting questions

Question

Stages of a Relationship?

Answered: 1 week ago