Cost Behavior
Fresh Powder, Inc., manufactures snowboards. Based on past experience, Fresh Powder has found that its
total annual overhead costs can be represented by the following formula: Overhead cost $
$ where equals number of snowboards. Last year, Fresh Powder produced snowboards.
Actual overhead costs for the year were as expected.
Required:
What is the driver for the overhead activity?
For questions Enter the final answers rounded to the nearest dollar.
What is the total overhead cost incurred by Fresh Powder last year?
$
What is the total fixed overhead cost incurred by Fresh Powder last year?
$
What is the total variable overhead cost incurred by Fresh Powder last year?
$
For questions round your answers to the nearest cent. Use those rounded figures in subsequent
computations, if necessary.
What is the overhead cost per unit produced?
per unit
What is the fixed overhead cost per unit?
$
per unit
What is the variable overhead cost per unit?
$
per unit
Recalculate Requirements and for the following levels of production: a units and b
units. Round your answers to the nearest cent.
The reason the unit costs changed in the way they did is because:
