Cost Behavior

Fresh Powder, Inc., manufactures snowboards. Based on past experience, Fresh Powder has found that its

total annual overhead costs can be represented by the following formula: Overhead cost $=$$$597,320+$

$$1\mathrm{.}33x,$ where $x$ equals number of snowboards. Last year, Fresh Powder produced $21,800$ snowboards.

Actual overhead costs for the year were as expected.

Required:

What is the driver for the overhead activity?

For questions $2-4,$ Enter the final answers rounded to the nearest dollar.

What is the total overhead cost incurred by Fresh Powder last year?

$

What is the total fixed overhead cost incurred by Fresh Powder last year?

$

What is the total variable overhead cost incurred by Fresh Powder last year?

$

For questions $5-7,$ round your answers to the nearest cent. Use those rounded figures in subsequent

computations, if necessary.

What is the overhead cost per unit produced?

per unit

What is the fixed overhead cost per unit?

$

per unit

What is the variable overhead cost per unit?

$

per unit

Recalculate Requirements $5,6,$ and $7$ for the following levels of production: $($a$)21,500$ units and $($b$)$

$23,800$ units. Round your answers to the nearest cent.

The reason the unit costs changed in the way they did is because: