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 1,450 tons of ore were extracted:

Straight-line depreciation	$	33,500
Charitable contributions*		9,500
Mining labor/fringe benefits		261,000
Royalties		147,250
Trucking and hauling		255,175

*Incurred only in December.

Peak activity of 2,750 tons occurred in June, resulting in mining labor/fringe benefit costs of $495,000, royalties of $244,750, and trucking and hauling outlays of $330,175. The trucking and hauling outlays exhibit the following behavior:

Less than 1,450 tons	$	217,675
From 1,450–1,949 tons		255,175
From 1,950–2,449 tons		292,675
From 2,450–2,949 tons		330,175

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 semivariable.

2. Calculate the total cost for next February when 1,750 tons are expected to be extracted.

3-a. Is hauling 1,450 tons with respect to Antioch’s trucking/hauling cost behavior cost-effective?

3-b. If the company plans to extract 1,450 tons, at what number of tons can cost-effectiveness be achieved?

4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe economic difficulties, which of the two types of fixed costs should management try to cut?

5. Speculate as to why the company’s charitable contribution cost arises only in December.