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Required information E5-4 and E5-5 [LO 5-1, 5-5] [The following information applies to the questions displayed below] Morning Dove Company manufactures one model of
Required information E5-4 and E5-5 [LO 5-1, 5-5] [The following information applies to the questions displayed below] 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 to 1,900 units, and monthly production costs for the production of 1,400 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Conta Direct materials Direct labor Utilities ($150 fixed) Supervisor's salary Maintenance ($320 fixed) Depreciation Total Cost $1,500 7,900 600 3,400 510 750 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 Dove's linear cost equation for a production level of 0 to1,900 units. Enter answer as an equation in the form of ya + bx. 4. Calculate Morning Dove's expected total cost if production increased to 1,600 units per month. Enter answer as an equation in the form of ya+ bx.
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