Question

Required information [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 0-1500 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 Costa Total Cost Direct materials $1,500 Direct labor 7,500 Utilities ($100 fixed) 650 Supervisor's salary 3,000 Maintenance (5280 fixed) 480 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). 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 ya. bx 4. Calculate Morning Dove's expected total cost of production increased to 1.200 units per month. Enter answer as an equation in the form ofyabx. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate Morning Dove's expected total cost it production increased to 1,200 units per month. Enter answer as an equation in the form of y-a + bx. (Round Variable cost per unit to 2 decimal places.)

Answer 1

1.

Pdn Cost	Behaviour	Rate
Direct Material (1500/500)	Variable	$3	Per unit		Per month
Direct Labor (7500/500)	Variable	$15	Per unit		Per month
Utilities (550/500)	Mixed	$1.1	Per unit	$100	Per month
Supervisor's salary	Fixed		Per unit	$3000	Per month
Maintainance (200/500)	Mixed	$0.4	Per unit	$280	Per month
Depreciation	Fixed		Per unit	$800	Per month

2.

Total VC per unit = 3 + 15 + 1.1 + 0.4 = $19.5

Total FC per month = 100 + 3000 + 280 + 800 = $4,180

3.

Total Cost = $4,180 + $19.5 *

4.

a	+	b	*	x	=	y
$4,180	+	$19.5	*	1200	=	$27,580