Answer:
1.
Production Crew Variable cost
July $12.50 per hr
September $12.50 per hr
Supervisory Fixed cost
July $12.82 per hr
September $7.81 per hr
2.
Production Crew = $5,250
Supervisory Employees = $5,000
Total cost = $10,250
3.
Production Crew Variable cost = $12.50 per hr
Supervisory Fixed cost = $11.90 per hr
Explanation:
Variable cost is those which vary with change in activity / sales / output whereas total Fixed cost remains the same, whatever the level of activity is.
In this question the Production crew variable cost will change with the change in Production hours and Total Supervisory fixed cost will remain the same whether there is a change in production hours.
1.
We can calculate the per hour cost dividing total variable cost per month by total numbers of hours
Production Crew Variable cost
July
Cost per hour = $4,875 ÷ 390 = $12.50 per hr
September
Cost per hour = $8,000 ÷ 640 = $12.50 per hr
Supervisory Fixed cost
July
Cost per hour = $5,000 ÷ 390 = $12.82 per hr
September
Cost per hour = $5,000 ÷ 640 = $7.81 per hr
2.
Variable cost varies with the change in numbers of hours, so variable cost for 420 hours.
Production Crew= 420 broadcast hours x $12.50 per hr = $5,250
Fixed cost remains the same
Supervisory Employees 5,000
Total cost =$5,250 + $5,000 = $10,250
3.
Production Crew Variable cost
Cost per hour = $5,250 ÷ 420 = $12.50 per hr
Supervisory Fixed cost
Cost per hour = $5,000 ÷ 420 = $11.90 per hr
