Question 1. Bozeman Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,200 units. The utilities and maintenance costs are mixed costs.The fixed portions of these costs are $266 and $260, respectively.
Production in Units 3,200
Production Costs
Direct materials $7,506
Direct labor 14,994
Utilities 1,834
Property taxes 1,080
Indirect labor 7,292
Supervisory salaries 1,752
Maintenance 1,156
Depreciation 2,415
Calculate the expected costs when production is 5,300 units.
Question 2. The Lake Shore Inn is trying to determine its break-even point. The inn has 50 rooms that are rented at $62 per night. Operating costs are as follows:
Salaries $7,436 per month
Utilities $1,431 per month
Depreciation $1,268 per month
Maintenance $377 per month
Maid Service $9 per room
Other Costs $29 per room
Determine the inn's break-even point in (1) number of rented rooms per month and (2) dollars.