The cost structure of Sackville Manufacturing Company $($SMC$)$ at two levels of production is as follows:

Units Costs:

Dircct maleriab..

Direct labour.....

Factory overhcad...

Total costs.

Average cost per unit...

$60,000$

$$120,000$

$90,000$

$216\mathrm{.}000$

$$426\mathrm{.}000$

$57\mathrm{.}10$

$80,000$

$$160,000$

$120,000$

$248\mathrm{.}000$

$3523\mathrm{.}000$

Required:

a$.$ Classify and explain each production cost as either strictly variable or strictly fixed or mixed

b$.$ Determine the total production cost equation for SMC$,$ using the units of production as the cost driver. $($Be sure to identify clearly all the separate components of the equation.

c$.$ Explain what causes the drop in average cost per unit from $$7\mathrm{.}10$ to $56\mathrm{.}60$ when production is increased from $60\mathrm{.}000$ to $80,000$ units. Show all supporting calculations.