Question

Required information 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 0-1,700 units, and monthly production costs for the production of 1,300 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Total Cost $2,700 7,500 Production Costs Direct materials Direct labor Utilities ($100 fixed) Supervisor's salary Maintenance ($260 fixed) Depreciation 580 2,700 540 750 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 0-1,700 units. Enter answer as an equation in the form of y=a+ 4. Calculate Morning Dove's expected total cost of production increased to 1,500 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.

Answer 1

• Requirement 1

	Behavior	Rate
Direct materials	Variable	$2.08	per unit		per month
Direct Labor	Variable	$5.77	per unit		per month
Utilities	Mixed	$0.37	per unit	$100	per month
Supervisor's Salary	Fixed		per unit	$2,700	per month
Maintenance	Mixed	$0.22	per unit	$260	per month
Depreciation	Fixed		per unit	$750	per month

• Requirement 2

Total Variable cost per unit	$8.44
Total Fixed Cost per month	$3,810

• [3]

Total Cost =

$3,810

+

$8.44

x

• [4]

a	+	b	x	X	=	Y
$3,810	+	$8.44	x	1500	=	$16,470