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 02,000 units, and monthly production costs for the production of 1,500 units follow. Morning Doves utilities and maintenance costs are mixed with the fixed components shown in parentheses.

Production Costs	Total Cost
Direct materials	$	2,500
Direct labor		7,900
Utilities ($120 fixed)		580
Supervisors salary		3,200
Maintenance ($270 fixed)		550
Depreciation		750

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 02,000 units. Enter answer as an equation in the form of y = a + bx.

4. Calculate Morning Doves expected total cost if production increased to 1,700 units per month. Enter answer as an equation in the form of y = a + bx.

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.)

Production Costs	Behavior	Rate
Direct Materials	Variable		per Unit		per Month
Direct labor	Variable		per Unit		per Month
Utilities	Mixed		per Unit		per Month
Supervisors Salary	Fixed		per Unit		per Month
Maintenance	Mixed		per Unit		per Month
Depreciation	Fixed		per Unit		per Month