Question
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 1,200 units follow. Morning Doves utilities and maintenance costs are mixed with the fixed components shown in parentheses.
Production Costs | Total Cost | |
Direct materials | $ | 2,100 |
Direct labor | 6,700 | |
Utilities ($110 fixed) | 620 | |
Supervisors salary | 2,600 | |
Maintenance ($320 fixed) | 550 | |
Depreciation | 900 | |
E5-4 (Algo) Determining Cost Behavior and Calculating Expected Cost [LO 5-1]
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).
2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove.
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.
4. Calculate Morning Doves expected total cost if production increased to 1,400 units per month. Enter answer as an equation in the form of y = a + bx.
E5-4 and E5-5 [LO 5-1, 5-5] 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 0-1,600 units, and monthly production costs for the production of 1,200 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Total Cost Direct materials $2,100 Direct labor 6,700 Utilities ($110 fixed) 620 Supervisor's salary 2,600 Maintenance ($320 fixed) 550 Depreciation 900 E5-4 (Algo) Determining Cost Behavior and Calculating Expected Cost [LO 5-1] 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). 2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. 3. State Morning Dove's linear cost equation for a production level of 0-1,600 units. Enter answer as an equation in the form of y=a + 4. Calculate Morning Dove's expected total cost if production increased to 1,400 units per month. Enter answer as an equation in the form of y = a + bx. bx. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 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.) Behavior Rate Production Costs Direct Materials per Unit per Month Direct labor Utilities per Unit per Unit per Unit per Month per Month Supervisor's Salary Maintenance per Unit per Month per Month per Month Depreciation per Unit (Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the total fixed cost per month and the variable cost per unit for Morning Dove. (Round your intermediate calculations and variable cost per unit to 2 decimal places.) Total Variable Cost per Unit Total Fixed Cost per Month Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 State Morning Dove's linear cost equation for a production level of 0-1,600 units. Enter answer as an equation in the form of y = a + bx (Round your intermediate calculations and variable cost per unit to 2 decimal places.) Total Cost Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate Morning Dove's expected total cost if production increased to 1,400 units per month. Enter answer as an equation in the form of y = a + bx. (Round intermediate calculations and variable cost per unit to 2 decimal places.) a b y $ 0Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started