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1 E5-2 Determining Cost Behavior and Calculating Expected Cost Morning Dove Company manufactures one model...

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1 E5-2 Determining Cost Behavior and Calculating Expected Cost 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 to 1,500 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 Costs Total Cost Direct materials Direct labor Utilities ($100 fixed Supervisor's salary Maintenance ($280 fixed) Depreciation $1,500 7,500 650 3,000 480 800 Required: variable, fixed, or mixed, and express each cost as a rate per month or per Identity each cost as unit (or combination thereof). State any assumptions you make. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. State Morning Dove's linear cost equation for a production level of O to 1,500 units. Calculate Morning Dove's expected total cost if production increased to 1,200 units per month. 1. 2. 3. 4

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