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Required information 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
Required information 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 0-1,800 units, and monthly production costs for the production of 1,500 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costa Direct materials Direct labor Utilities ($130 fixed) Supervisor's salary Maintenance ($280 fixed) Depreciation Total Cost $1,500 7,300 620 3,100 490 900 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 0-1,800 units. Enter answer as an equation in the form of y=a+ bx. 4. Calculate Morning Dove's expected total cost if production increased to 1,700 units per month, Enter answer as an equation in the form of y a + bx.
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