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		$	4,140		360
September			7,360		640
Supervisory employees	Fixed
July			5,000		360
September			5,000		640

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 390 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.)

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

What will be the total amount incurred for each of these costs during December, when the station’s activity will be 390 broadcast hours?

	Total Cost
Production crew
Supervisory employees

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

Requirement 1
	Cost per Broadcast Hour
Cost Item	July		September
Production crew	11.50	per hour	11.50	per hour
	(4140/360)		(7360/640)
Supervisory employees	13.89	per hour	7.81	per hour
	(5000/360)		(5000/640)

Requirement 2
	Total Cost
Production crew	4485
	(390*11.50)
Supervisory employees	5000
	(Fixed)
Requirement 3
Cost Item	Cost per Broadcast Hour in December
Production crew	11.50	per hour
	(4485/390)
Supervisory employees	12.82	per hour
	(5000/390)