Seaside Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Seaside has the following manufacturing costs: (Click the icon to view the manufacturing costs.) Seaside currently produces 220 vehicles per month. Requirement 1. What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? The variable cost per vehicle is Data table Plant management costs, $1,464,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, $500 per Surfer vehicle produced Direct materials costs: Steel, $1,200 per Surfer; Tires, $150 per tire, each Surfer takes 5 tires (one spare) City license, which is charged monthly based on the number of tires used in production: 0-500 tires $ 50,000 501-1,000 tires $ 95,000 more than 1,000 tires $ 250,000 Requirements, 1. What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? 2. Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graphs? Explain. 3. What is the total manufacturing cost of each vehicle if 80 vehicles are produced each month? 205 vehicles? How do you explain the difference in the manufacturing cost per unit?
Seaside Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Seaside has the following manufacturing costs: (Click the icon to view the manufacturing costs.) Seaside currently produces 220 vehicles per month. Requirement 1. What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? The variable cost per vehicle is Data table Plant management costs, $1,464,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, $500 per Surfer vehicle produced Direct materials costs: Steel, $1,200 per Surfer; Tires, $150 per tire, each Surfer takes 5 tires (one spare) City license, which is charged monthly based on the number of tires used in production: 0-500 tires $ 50,000 501-1,000 tires $ 95,000 more than 1,000 tires $ 250,000 Requirements, 1. What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? 2. Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graphs? Explain. 3. What is the total manufacturing cost of each vehicle if 80 vehicles are produced each month? 205 vehicles? How do you explain the difference in the manufacturing cost per unit?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Seaside Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple
surfboards in its back area and top-mounted storage racks. Seaside has the following manufacturing costs:
(Click the icon to view the manufacturing costs.)
Seaside currently produces 220 vehicles per month.
Requirement 1. What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month?
The variable cost per vehicle is
Data table
Plant management costs, $1,464,000 per year
Cost of leasing equipment, $1,932,000 per year
Workers' wages, $500 per Surfer vehicle produced
Direct materials costs: Steel, $1,200 per Surfer; Tires, $150 per tire, each Surfer takes 5 tires (one spare)
City license, which is charged monthly based on the number of tires used in production:
0-500 tires
$
50,000
501-1,000 tires
$
95,000
more than 1,000 tires
$
250,000
Requirements,
1.
What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost
per month?
2.
Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per
month. How does the concept of relevant range relate to your graphs? Explain.
3.
What is the total manufacturing cost of each vehicle if 80 vehicles are produced each month? 205
vehicles? How do you explain the difference in the manufacturing cost per unit?
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