-dPR 6-37 (Algo) Cost Behavior and Analysis; High-Low Method (LO 6-2, 6-4, 6-5)Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December, thelow point of activity, when 1,500 tons of ore were extracted:Straight-line depreciationCharitable contributions*Mining labor/fringe benefitsRoyaltiesTrucking and hauling$ 35,00010,000277,500145,000279,915*Incurred only in December.Peak activity of 2,800 tons occurred in June, resulting in mining labor/fringe benefit costsof $518,000, royalties of $236,000, and trucking and hauling outlays of $364,915. Thetrucking and hauling outlays exhibit the following behavior:Less than 1,500 tons.From 1,500 to 1,999 tonsFrom 2,000 to 2,499 tonsFrom 2,500 to 2,999 tons$ 237,415279,915322,415364,915Antioch uses the high-low method to analyze costs.Required:1. Classify the five costs listed in terms of their behavior: variable, step-variable,committed fixed, discretionary fixed, step-fixed, or semivariable.2. Calculate the total cost for next February when 1,800 tons are expected to beextracted.3-a. Is hauling 1,500 tons with respect to Antioch's trucking/hauling cost behavior cost-offentliin?

Cost behavior analysis is an analysis undertaken by the management of the organization to get to…

Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial- reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when 1,500 tons of ore were extracted: Straight-line depreciation Charitable contributions* Mining labor/fringe benefits Royalties Trucking and hauling *Incurred only in December. $ 35,000 10,000 277,500 145,000 279,915

Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial- reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when 1,500 tons of ore were extracted: Straight-line depreciation Charitable contributions* Mining labor/fringe benefits Royalties Trucking and hauling *Incurred only in December. $ 35,000 10,000 277,500 145,000 279,915

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PR 6-37 (Algo) Cost Behavior and Analysis; High-Low Method (LO 6-2, 6-4, 6-5) Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when 1,800 tons of ore were extracted: Straight-line depreciation Charitable contributions* Mining labor/fringe benefits Royalties Trucking and hauling *Incurred only in December. Peak activity of 3,100 tons occurred in June, resulting in mining labor/fringe benefit costs of $666,500, royalties of $173,000, and trucking and hauling outlays of $495,385. The trucking and hauling outlays exhibit the following behavior: Less than 1,800 tons From 1,800 to 2,299 tons From 2,300 to 2,799 tons From 2,800 to 3,299 tons Antioch uses the high-low method to analyze costs. Required: 1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or…