1. Classify the five costs listed in the terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or semi variable. Show calculations to support your answers for mining labor/fringe benefits and royalties.
2. Calculate the total cost for next February when 1,650 tons are expected to be extracted.
3. Comment on the cost-effectiveness of hauling 1,500 tons with respect to Antioch’s trucking/hauling cost behavior: Can the company’s effectiveness be improved? How?
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? why?
5. Speculate as to why the company’s charitable contributions cost arise only in December.