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Question: brief exercise 325 creating and using a cost formula kleenaire...

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Brief Exercise 3-25 Creating and Using a Cost Formula Kleenaire Motors manufactures hybrid sports utlity vehicles (SUVs). Kleenaire incurs monthly dep ciation costs of $10,000,000 on its highly automated plant machinery and warehousing facility. Also, each SUV requires materials and manufacturing overhead resources. On average, the company uses 75,000,000 pounds of steel to manufacture 50,000 SUVs per month. Each pound of steel costs $0.20. In addition, manufacturing overhead resources are driven by machine hours. On average, the company incurs $200,000,000 ofvariable manufacturingoverhead resources to produce 50,000 SUVsper month. OBJEC Examp Required: 1. Create a formula for the monthly cost of SUVs for Kleenaire. 2. If Kleenaire expects to manufacture 55,000 SUVs next month, what is the expected fixed cost (assuming that 55,000 units is within the companys current relevant range)? Total variable cost? Total manufacturing cost (i.c, both fixed and variable)?
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