Question

WMEJ is an independent television station run by a major state university. The station’s broadcast hours vary during the year depending on whether the university is in session. The station’s production-crew and supervisory costs are as follows for July and September.

Cost Item	Cost Behavior	Cost Amount			Broadcast Hours during Month
Production crew	Variable
July		$	4,662		370
September			8,568		680
Supervisory employees	Fixed
July			4,100		370
September			4,100		680

Required:

1. Compute the cost per broadcast hour during July and September for each of these cost items.

Cost Item Production crew Supervisory employees Cost per Broadcast Hour July September per hour per hour per hour per hour

2. What will be the total amount incurred for each of these costs during December, when the station’s activity will be 400 broadcast hours?

3. What will be the cost per broadcast hour in December for each of the cost items?

Answer 1

ost Item	Cost	Cost	Broadcast Hours
	Behavior	Amount	during Month
Production crew	Variable
July		4,662	370
September		8,568	680
Supervisory employees	Fixed
July		4,100	370
September		4,100	680
Cost per hour = Total cost/Total hours
	July	September
Production Crew	12.6	12.6	per hour
Supervisory employees	11.08108108	6.029411765	per hour
Fixed costs do not change with the change in level of activity
	Total Cost
Production Crew	5040
Supervisory employees	4100
3.Cost per hour
Production Crew	12.6	Per hour
Supervisory employees	10.25	Per hour

Cost D Broadcast Hours during Month I B C Cost Behavior Amount Variable 4662 8568 Fixed 4100 4100 1 ost Item 2 3 Production crew 4 July 5 September 6 Supervisory employees 7 July 8 September 9 10 11 Cost per hour = Total cost/Total hours 370 680 370 680 12 13 Production Crew 14 Supervisory employees July =C4/D4 =C7/D7 September =C5/D5 per hour =C8/D8 per hour 15 16 Fixed costs do not change with the change in level of activity 17 Total Cost 18 Production Crew =400*С13 19 Supervisory employees 4100 20 21 3.Cost per hour 22 Production Crew =B18/400 Per hour 23 Supervisory employees =B19/400 Per hour