Question

WMEJ is an independent television station run by a major state university. The station’s broadcast hours vary during the year depending on whether the university is in session. The station’s production-crew and supervisory costs are as follows for July and September.

Cost Item	Cost Behavior	Cost Amount			Broadcast Hours during Month
Production crew	Variable
July		$	5,625			450
September			8,625			690
Supervisory employees	Fixed
July			5,300			450
September			5,300			690

Required:
1. Compute the cost per broadcast hour during July and September for each of these cost items.
2. What will be the total amount incurred for each of these costs during December, when the station’s activity will be 480 broadcast hours?
3. What will be the cost per broadcast hour in December for each of the cost items?

Compute the cost per broadcast hour during July and September for each of these cost items. (Round your answers to 2 decimal places.)

1.)
	Cost per Broadcast Hour Cost Item July September Production crew per hour per hour Supervisory employees per hour per hour

2.)

What will be the total amount incurred for each of these costs during December, when the station’s activity will be 480 broadcast hours?

	Total Cost Production crew Supervisory employees

3.)

What will be the cost per broadcast hour in December for each of the cost items? (Round your answers to 2 decimal places.)

	Cost Item Cost per Broadcast Hour in December Production crew per hour Supervisory employees per hour

Answer 1

SOLUTION

1.

			Cost per Broadcast Hour
	Cost Item	July	September
	Production crew:
	$5625/450 hr....................................	$12.50 per hr.
	$8625/690 hr....................................		$12.50 per hr.
	Supervisory employees:
	$5300/450 hr....................................	11.78 per hr.*
	$5300/690 hr....................................		7.68 per hr.*

*Rounded.                  

2.         December cost predictions:            

Production crew (480 × $12.50 per hr.)………………….                $6000

Supervisory employees…………………………………...               5300

3.

Cost Item	Cost per Broadcast Hour in December
Production crew.........................................................	$12.50 per hr.
Supervisory employees ($5300/480 hr.)...................	11.04per hr.*
*Rounded.