Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells...
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Accounting
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 01,500 units, and monthly production costs for the production of 1,200 units follow. Morning Doves utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Total Cost Direct materials $ 1,900 Direct labor 7,500 Utilities ($140 fixed) 570 Supervisors salary 2,800 Maintenance ($310 fixed) 460 Depreciation 800
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). (Round your per unit value to 2 decimal places.)
Production Costs
Behavior
Rate
Direct Materials
per Unit
per Month
Direct labor
per Unit
per Month
Utilities
per Unit
per Month
Supervisors Salary
per Unit
per Month
Maintenance
per Unit
per Month
Depreciation
per Unit
per Month
2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. (Round your variable cost per unit to 2 decimal places.)
Total Variable Cost per Unit
Total Fixed Cost per Month
3. State Morning Doves linear cost equation for a production level of 01,500 units. Enter answer as an equation in the form of y = a + bx. (Round your variable cost per unit to 2 decimal places.)
Total Cost =
+
x
4. Calculate Morning Doves expected total cost if production increased to 1,400 units per month. Enter answer as an equation in the form of y = a + bx. (Round Variable cost per unit to 2 decimal places.)
a
+
b
X
x
=
y
$
Answer & Explanation
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