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Seashore 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. Seashore has the following

manufacturing costs:

$($Click the icon to view the manufacturing costs.$)$

Seashore currently produces $200$ 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

Determine the fixed manufacturing cost per month at each of the following capacity levels.

$0-500$ tires per month

$501-1,000$ tires per month

more than $1,000$ tires per month

Requirements

What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost

per month?

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.

What is the total manufacturing cost of each vehicle if $70$ vehicles are produced each month? $195$

vehicles? How do you explain the difference in the manufacturing cost per unit?

Data table

Plant management costs, $$2,388,000$ per year

Cost of leasing equipment, $$2,724,000$ per year

Workers' wages, $$700$ per Surfer vehicle produced

Direct materials costs: Steel, $$1,500$ per Surfer; Tires, $$110$ per tire, each Surfer

takes $5$ tires $($one spare$)$

City license, which is charged monthly based on the number of tires used

in production:

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