Variable and fixed costs. Consolidated 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. Consolidated has the following manufacturing costs: Plant management costs, $1,992,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, $800 per Surfer vehicle produced Direct materials costs: Steel, $1,400 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 501-1,000 tires more than 1,000 tires $ 40,040 $ 65,000 $249,870 Consolidated currently produces 170 vehicles per month. Required: 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

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Ef 35.

Variable and fixed costs. Consolidated 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. Consolidated has the following manufacturing costs:
Plant management costs, $1,992,000 per year
Cost of leasing equipment, $1,932,000 per year
Workers' wages, $800 per Surfer vehicle produced
Direct materials costs: Steel, $1,400 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
501-1,000 tires
more than
1,000 tires
$ 40,040
$ 65,000
$249,870
Consolidated currently produces 170 vehicles per month.
Required:
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
Transcribed Image Text:Variable and fixed costs. Consolidated 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. Consolidated has the following manufacturing costs: Plant management costs, $1,992,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, $800 per Surfer vehicle produced Direct materials costs: Steel, $1,400 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 501-1,000 tires more than 1,000 tires $ 40,040 $ 65,000 $249,870 Consolidated currently produces 170 vehicles per month. Required: 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
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