Beacher Motor specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Beacher has the following manufacturing costs:

Plant management costs, $1,200,000 per year

Cost of leasing equipment, $1,800,000 per year

Workers' wages, $4700 per Surfer vehicle produced

Direct materials costs: Steel, $1,500 per Surfer; Tires, $125 per tire, each Surfer takes 5 tires (one spare).

City license, which is charged monthly based on the number of tires used in production:

     0-500 tires     $50,000

     501-1,000 tires     $74,500

     more than 1,000 tires     $200,000

Beacher currently produces 110 vehicles per month. (SHOW ALL YOUR WORK for the following)

1) What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month?

2) Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graph? Explain.

3) What is the total manufacturing cost of each vehicle if 100 vehicles are produced each month? 225 vehicles? How do you explain the difference in the manufacturing cost per unit?