E3 u per Watch and has variable costs of $18 034,000, what is the projected prof
ID: 2549081 • Letter: E
Question
E3
u per Watch and has variable costs of $18 034,000, what is the projected profit? EXERCISES: SET A 1 Identification of Variable and Fixed Costs E1A. Indicate whether each of the following costs of producti variable or (b) fixed: 1. License fee for company car 2. Wiring used in radios 3. Machine helper's wages 4. Wood used in bookcases 5. City operating license ve output is usually (a) 6. Machine depreciation based on machine hours used 7. Machine operator's hourly wages 8. Cost of required outside inspection of each unit producedExplanation / Answer
Total variable cost - Varies with production. Variable cost per unit is constant.
Total fixed cost - Fixed in total. Fixed cost per unit Increases with decrease in production and decreases with increase in production.
1. Fixed cost
2. Variable cost
3. Fixed cost
4. Variable cost
5. Fixed cost
6. Variable cost
7. Variable cost
8. Variable cost
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Variable electricity cost per machine hour = (Electricity cost at high point - Electrivity cost at low point) / (Volume in machine hours at high point - Volume in machine hours at low point)
= (60,000 - 36,000) / (6,000 - 3,000)
= 24,000 / 3,000
= 8 per unit
Fixed cost = Total cost - Variable cost
= 60,000 - (6,000*8)
= 12,000
Total variable electricity costs = 4,800 * 8 = 38,400
Fixed electricity costs = 12,000
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