Question

Specializes in producing one specialty vehicle. It is urtboards in its back area and top-mounted storage racks. 2-27 Variable and Fixed Costs. Consolidated Motors specializes in producing on called Surfer and is styled to easily fit multiple surfboards in its back area and top-mo Consolidated has the following manufacturing costs: Plant management costs, $1,992,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, $800 per Surfer vehicle produced Direct materials costs: Steel, $1,400 per Surfer; Tires, $150 per tire, each Surfer takes 5 tires (one spare City license, which is charged monthly based on the number of tires used in production 0-500 tires $ 40,040 501-1,000 tires $ 65,000 more than 1,000 tires $249,870 Consolidated currently produces 170 vehicles per month. 1. What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? 2. Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graphs? Explain. 3. What is the total manufacturing cost of each vehicle if 80 vehicles are produced each month? 205 vehicles? How do you explain the difference in the manufacturing cost per unit?

Answer 1

Variable cost per vehicle if so vehicles are and dos vehicles are produced each mon . Particulars Amount 002. Direct material Steel __ Tires (1505) Workers wages Variable 1400 450 800 $ 2950 cost per toon - vehide. Siged manufactering cost per month - Particulars Caseli) Caseçi, aos vehicles so vehicles 166000 1 GGOOO Plant management costs - (1992.000.) Cost of leasing equipment per month__ (1932000) city licence 161000 161000 40Quo (80x5 $36 touo 249 570 (205x5) $576870 Total manufacturing cost per month