Question

[The following information applies to the questions displayed below.] 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 0-1,500 units, and monthly production costs for the production of 500 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($100 fixed) Supervisor's salary Maintenance ($280 fixed) Depreciation Total Cost $1,500 7,500 650 3,000 480 800 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). 2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. 3. State Morning Dove's linear cost equation for a production level of 0-1,500 units. Enter answer as an equation in the form of y= a + bx. 4. Calculate Morning Dove's expected total cost if production increased to 1,200 units per month. Enter answer as an equation in the form of y= a + bx. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 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 Direct labor Utilities per Unit per Unit per Unit per Month per Month per Month

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 0–1,500 units, and monthly production costs for the production of 500 units follow. Morning Dove’s utilities and maintenance costs are mixed with the fixed components shown in parentheses.

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).

2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove.

3. State Morning Dove’s linear cost equation for a production level of 0–1,500 units. Enter answer as an equation in the form of y = a + bx.

4. Calculate Morning Dove’s expected total cost if production increased to 1,200 units per month. Enter answer as an equation in the form of y = a + bx.

Please help me! I appreciate any help that is given! Thanks in advance!

Answer 1

1.

Production cost	Behavior			Rate
Direct material	Variable	$3 (1,500/500)	per unit
Direct labor	Variable	15 (7,500/500)	per unit
Utilities	Mixed	1.1 (550/500)	per unit	$100	per month
Supervisors salary	Fixed			3,000	per month
Maintenance	Mixed	0.4 (200/500)	per unit	280	per month
Depreciation	Fixed			800	per month

2.

Total variable cost per unit = $19.5 (3+15+1.1+0.4)

Total fixed cost per month = $4,180 (100+3,000+280+800)

3.

Total cost = $4,180 + $19.5 * X

4.

$4,180 + $19.5 * 1,200 = $27,580