Question
(X) Company specializes in producing one specialty vehicle. It is called GTX. (X) Company has the following manufacturing costs: Plant management costs, $(0178028) per year.
(X) Company specializes in producing one specialty vehicle. It is called GTX. (X) Company has the following manufacturing costs: Plant management costs, $(0178028) per year. Cost of leasing equipment, $1,932,000 per year. Workers wages, $800 per GTX vehicle produced. Direct materials costs: Steel, $(8028)*** per GTX vehicle produced; Tires, $150 per tire, each GTX takes 5 tires (one spare). City license, which is charged monthly based on the number of tires used in production:
0500 tires $ 40,040 5011,000 tires $ 65,000 more than 1,000 tires $249,870
(X) Company currently produces 170 vehicles per month.
Using the information above, answer the following five questions:
Q1: What is the variable manufacturing cost per vehicle? Q2: What is the fixed manufacturing cost per month if 205 vehicles are produced each month? Q5: How do you explain the difference in the manufacturing cost per unit in Q4 & Q5?
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