this has been my headache for 2 days straight.
requiered 1-5
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 1,150 tons of ore were extracted 6,500 Straight-line depreciation $ 24,500 Charitable contributions Mining labor/fringe benefits 172.500 Royalties 150,250 Trucking and hauling 177,205 "Incurred only in December Peak activity of 2.450 tons occurred in June, resulting in mining labor/fringe benefit costs of $367,500, royalties of $286750, and trucking and hauling outlays of $222,205. The trucking and hauling outlays exhibit the following behavior Less than 1,150 tons From 1,150-1,649 tons From 1,650-2,149 tons From 2,150-2,649 tons $154,705 177,205 199,705 222,205 Antioch uses the high-low method to analyze costs Required: 1. Classify the five costs listed in terms of their behavior variable, step variable committed fixed, discretionary fixed, step-fixed, on Peak activity of 2.450 tons occurred in June, resulting in mining labor?fringe benefit costs of $367,500, royalties of $286,750, and trucking and hauling outlays of $222,205. The trucking and hauling outlays exhibit the following behavior. Less than 1, 150 tons From 1,150-1,649 tons From 1,650-2,149 tons From 2.150-2,649 tons $154,705 177,205 199,785 222,205 Antioch uses the high-low method to analyze costs Required: 1. Classify the five costs listed in terms of their behavior: variable step-variable.committed fixed, discretionary fixed, step-fixed or semivariable 2. Calculate the total cost for next February when 1450 tons are expected to be extracted 3-a. Is hauling 1.150 tons with respect to Antioch's trucking/hauling cost behavior cost-effective? 3-b. If the company plans to extract 1150 tons, at what number of tons can cost effectiveness be achieved? 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? 5. Speculate as to why the company's charitable contribution cost arises only in December