Please help me answer this question p6-37.
... cob_managerial_accounting_creating_value_in_a_dynamic_business_environment_11e (12).pdf (SECURED) Home Tools cob_managerial_a... x ? A T 295 (296 of 849) 100% Problem 6-37 Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when Cost Behavior and Analysis; Search tools 1,500 tons of ore were extracted: High-Low Method (LO 6-2, 6-4, 6-5) L Straight-line depreciation .. $ 25,000 Royalties . $135,000 2. Total cost for 1,650 tons: Lo Create PDF Charitable contributions* 11,000 Trucking and hauling ... 275,000 $823,500 Mining labor/fringe benefits 345,000 "Incurred only in December. Combine Files Peak activity of 2,600 tons occurred in June, resulting in mining labor/fringe benefit costs of $598,000, Edit PDF royalties of $201,000, and trucking and hauling outlays of $325,000. The trucking and hauling outlays exhibit the following behavior: x& Adobe Sign FEATURED Less than 1,500 tons $250,000 From 1,500-1,899 tons . 275,000 From 1,900-2,299 tons 300,000 Lu Fill & Sign From 2,300-2,699 tons .. 325,000 Export PDF Antioch uses the high-low method to analyze costs. Required: Organize Pages 1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or semivariable. Show calculations to support your answers for mining labor/fringe benefits and royalties. La Send for Comments 2. Calculate the total cost for next February when 1,650 tons are expected to be extracted. 3. Comment on the cost-effectiveness of hauling 1,500 tons with respect to Antioch's trucking/haul- Scan & OCR ing cost behavior. Can the company's effectiveness be improved? How? 4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe economic difficulties, which of the two types of fixed costs should management try to cut? Why? Protect 5. Speculate as to why the company's charitable contribution cost arises only in December. More Tools Nation's Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The Problem 6-38 firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. High-Low Method; Fitness The cost behavior pattern of the firm's equipment maintenance costs must be determined. The account- Centers ing staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data (LO 6-1, 6-2, 6-5) Your current plan is Creative Cloud regarding the maintenance hours and costs for last year are as follows: 3. Cost prediction at 590 hours of activity, mainte- Hours of Maintenance nance cost: $4,995 Learn More Month Maintenance Service Costs
