Reference no: EM132438292
Problem: Blended 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. Blended has the following manufacturing? costs:
Plant management? costs, $2,256,000 per year
Cost of leasing? equipment, $1,800,000 per year
?Workers' wages,$700 per Surfer vehicle produced
Direct materials? costs: Steel, $1,500 per? Surfer; Tires, $130 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 $60,000
?501-1,000 tires $75,000
more than? 1,000 tires $250,000
Blended currently produces 210 vehicles per month.
Required:
Question 1: What is the variable manufacturing cost per? vehicle? What is the fixed manufacturing cost per? month?
Question 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.
Question 3: What is the total manufacturing cost of each vehicle if 75 vehicles are produced each? month? 200 ?vehicles? How do you explain the difference in the manufacturing cost per? unit?
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