Question
Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area andtop-mounted storage
Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area andtop-mounted storage racks.
SeashoreSeashore has the following manufacturing costs:
SeashoreSeashore currently produces180 vehicles per month.
1.
What is the variable manufacturing cost pervehicle? What is the fixed manufacturing cost per month? | |
2. | Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graphs? Explain. |
3. | What is the total manufacturing cost of each vehicle if 95 vehicles are produced each month? 220 vehicles? How do you explain the difference in the manufacturing cost per unit? |
Data Table Plant management costs, $1,728,000 per year Cost of leasing equipment, $2,988,000 per year Workers' wages, $700 per Surfer vehicle produced Direct materials costs: Steel, $1,300 per Surfer; Tires, $120 per tire, each Surfer takes 5 tires (one spare) City license, which is charged monthly based on the number of tires used in production: $30,000 500 tires 501-1,000 tires $65,000 $210,000 more than 1,000 tires Print Done
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