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 0-1,500 units, and monthly production costs for the production of 1,100 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($110 fixed) Supervisor's salary Maintenance ($270 fixed) Depreciation Total Cost $2,700 6,900 600 3,500 540 800 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 y = a + ox. 4. Calculate Morning Dove's expected total cost if production increased to 1,300 units per month. Enter answer as an equation in the orm of y = a + bx.

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 0-1,500 units, and monthly production costs for the production of 1,100 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($110 fixed) Supervisor's salary Maintenance ($270 fixed) Depreciation Total Cost $2,700 6,900 600 3,500 540 800 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 y = a + ox. 4. Calculate Morning Dove's expected total cost if production increased to 1,300 units per month. Enter answer as an equation in the orm of y = a + bx.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 1COMP

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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 0-1,500 units, and monthly production costs for the production of 1,100 units
follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses.
Production Costs
Direct materials
Direct labor
Utilities ($110 fixed)
Supervisor's salary
Maintenance ($270 fixed)
Depreciation
Total Cost
$2,700
6,900
600
3,500
540
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 y = a +
bx.
4. Calculate Morning Dove's expected total cost if production increased to 1,300 units per month. Enter answer as an equation in the
form of y= a + bx.

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