Hi, can you help me with this please QUESTION 1 1. (a) Identify the costs below

Question

Hi, can you help me with this please

QUESTION 1 1. (a) Identify the costs below as either variable, fixed, or mixed, (b) Also, thoroughly and clearly support your identify of each cost a Cell phone bill of the sales force b. Paint used to paint the tractors on the assembly line Activity method depreciation on painting equipment d. Utility expense on factory If the highest month of utility costs is February equaling $9.240 when the total eloctriaity used was 18,000 klawathe owest morth of Lilty co watts May equaling $5,280 where electricity use is 7,000 KwHs, estimate the utility cost for June if the utility usage is estimated to be 11,500 KWHs. Show al computations. 3. Carmen is asking for your help in determine her home-based, custom baking company. She provided the following information Insurance $ 1,000/month 700/month Depreciation on baking equipment 100/month Advertising Click Save and Submit to save and submit. Click Save All Ansuvers to sqve all ansuwers. MacBook Air 6 esc

Explanation / Answer

1(a).

a.Mixed as some part of the bill is fixed and other variable depending upon the calls made

b. Variable

c. fixed

d. Variable

Part 2

Variable cost component = ($9240-$5280)/(16000-7000) = $3960/9000 = $ 0.44/kwh

Fixed cost = Total cost - variable cost = 9240 - (0.44x16000) = 9240 - 7040 = $ 2200

Thus for 11500 kwh = 2200 + (11500x0.44) = $ 7260

Part 3.a

Contribution = Sales - VC = 25 - (6+5+1) = $ 13

BEP = Fixed cost / contribution = 1800 / 13 = 139 units approx

Part 3.b

Contribution = Sales - VC = 27.50 - (6+5+1) = $ 15.50

BEP = 1800/15.50 = 116 units approx

Thus number of units required for BEP would be less as she will have higher contribution margin per unit

Factors she should consider are the demand of the product, fluctuation in cost, competitors price etc.

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