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Morning Dove Company manufactures one model of birdbath, whichis very popular. Morning Dove sells all units it produces eachmonth. The relevant range is 0–1,600 units, and monthly productioncosts

Morning Dove Company manufactures one model of birdbath, whichis very popular. Morning Dove sells all units it produces eachmonth. The relevant range is 0–1,600 units, and monthly productioncosts for the production of 1,200 units follow. Morning Dove’sutilities and maintenance costs are mixed with the fixed componentsshown in parentheses.

Production Costs TotalCost
Direct materials $ 2,300
Direct labor   6,700
Utilities ($110 fixed)   640
Supervisor’s salary   3,100
Maintenance ($330 fixed)   500
Depreciation   750
 


Required:
1.
 Identify each cost as variable, fixed, or mixed, andexpress each cost as a rate per month or per unit (or combinationthereof). (Round your per unit value to 2 decimalplaces.)

 
 
Production Costs Behavior Rate
Direct Materials     per Unit   perMonth
Direct labor     per Unit   perMonth
Utilities     perUnit   perMonth
Supervisor’s Salary     perUnit   perMonth
Maintenance     perUnit   perMonth
Depreciation     per Unit   per Month

2. Determine the total fixed cost per month andthe variable cost per unit for Morning Dove. (Round yourvariable cost per unit to 2 decimal places.)

Total Variable Cost per Unit

Total Fixed Cost per Month


3. State Morning Dove’s linear cost equation for aproduction level of 0–1,600 units. Enter answer as an equation inthe form of y = a + bx. (Round your variable cost per unitto 2 decimal places.)

 
 
TotalCost =   +   x


4. Calculate Morning Dove’s expected total cost ifproduction increased to 1,200 units per month. Enter answer as anequation in the form of y = a + bx. (Round Variable costper unit to 2 decimal places.)

 
 
             
a + b X x = y
             

May 31 2021 View more View Less

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