#2 and 3B

Problem 6-37 Cost Behavior and Analysis: High-Low Method (LO 6-2, 6-4, 6-5) Ints 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 1,150 tons of ore were extracted: Straight-line depreciation Charitable contribution $ 24,500 6.500 Mining labor/tringe benefits Royalties 172,500 150,250 Trucking and hauling 177,205 incurred only in December Peak activity of 2,450 tons occurred in June, resulting in mining labor/fringe benefit costs of $307,500, royalties of $286,760, and trucking and hauling outlays of $222.205. The trucking and hauling outlays exhibit the following behavior Less than 1.150 tons From 1,150-1,649 tona From 1.650-2.149 tons From 2, 150-2,649 tona 5156, 705 177,205 199,705 222,205 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 Prey 3 of 3 Next Return to question Required: 1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fred, or semivariable. 2. Calculate the total cost for next February when 1450 tons are expected to be extracted. 3-a. Is hauling 1150 tons with respect to Antioch's trucking/hauling cost behavior cost-effective? 3-b. If the company plans to extract 1,150 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, Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Reg 38 Reg 4 Req5 Calculate the total cost for next February when 1,450 tons are expected to be extracted Total cost $ 666,203 qon 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 1,450 tons are expected to be extracted. 3-a. Is hauling 1150 tons with respect to Antioch's trucking/hauling cost behavior cost-effective? 3-b. If the company plans to extract 1150 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 Answer is not complete. Complete this question by entering your answers in the tabs below. Reg1 Reg 2 Reg 3A Reg 38 Reg 4 Reg 5 If the company plans to extract 1,150 tons, at what number of tons can cost-effectiveness be achieved? Number of tons