Fresh Powder, Inc., manufactures snowboards. Based on past experience, Fresh Powder has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $614,100 + $1.26X, where X equals number of snowboards. Last year, Fresh Powder produced 23,000 snowboards. Actual overhead costs for the year were as expected.

Required:

1. What is the driver for the overhead activity?


For questions 2-4, Enter the final answers rounded to the nearest dollar.

2. What is the total overhead cost incurred by Fresh Powder last year?

$fill in the blank 2
3. What is the total fixed overhead cost incurred by Fresh Powder last year?

$fill in the blank 3
4. What is the total variable overhead cost incurred by Fresh Powder last year?

$fill in the blank 4
For questions 5-7, round your answers to the nearest cent. Use those rounded figures in subsequent computations, if necessary.

5. What is the overhead cost per unit produced?

$fill in the blank 5
per unit

6. What is the fixed overhead cost per unit?

$fill in the blank 6
per unit

7. What is the variable overhead cost per unit?

$fill in the blank 7
per unit

8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 22,300 units and (b) 24,400 units. Round your answers to the nearest cent.

22,300 Units 24,400 Units
Unit cost $fill in the blank 8
$fill in the blank 9
Unit fixed cost fill in the blank 10
fill in the blank 11
Unit variable cost fill in the blank 12
fill in the blank 13
The reason the unit costs changed in the way they did is because: