Homework: Cost Behavior and Cost Prediction Oct Nov Unit Sales 4,000 6,000 Cost
ID: 2608677 • Letter: H
Question
Homework: Cost Behavior and Cost Prediction Oct Nov Unit Sales 4,000 6,000 Cost of Food Sold $ 2,000 $ 3,000 Depreciation 500 500 Supplies 500 750 Wages and Salaries 5,000 5,500 Utilities 1,400 1,500 Rent 4,000 4,000 Total $ 13,400 $ 15,250 What is the Unit Variable Cost and Fixed Costs? Predict the Average and Total Costs for 7000 units Homework: Cost Behavior and Cost Prediction Oct Nov Unit Sales 4,000 6,000 Cost of Food Sold $ 2,000 $ 3,000 Depreciation 500 500 Supplies 500 750 Wages and Salaries 5,000 5,500 Utilities 1,400 1,500 Rent 4,000 4,000 Total $ 13,400 $ 15,250 What is the Unit Variable Cost and Fixed Costs? Predict the Average and Total Costs for 7000 unitsExplanation / Answer
Calculation of unit variable cost & fixed cost
Increase in cost for increase in units
Increase %
Cost
Fixed costs for 7000 units
Calculation
Variable costs for 7000 units
Calculation
Unit Sales
4000
6000
2000
50%
Variable cost
7000
7000
Cost of Food Sold
2000
3000
1000
50%
Variable cost since increase in units % = Increase in % variable cost
-
NA
3,500
100% Variable cost
Depreciation
500
500
0
0%
Fixed cost
500
100% Fixed cost
-
NA
Supplies
500
750
250
50%
Variable cost
-
NA
875
100% Variable cost
Wages and Salaries
5000
5500
500
10%
Semi variable cost
4,000
(5500-(500/2000*6000))
1,750
(500/2000*7000)
Utilities
1400
1500
100
7%
Semi variable cost
1,200
(1500-(100/2000*6000))
350
(100/2000*7000)
Rent
4000
4000
0
0%
Fixed cost
4,000
100% Fixed cost
-
NA
Total
$ 13,400
$ 15,250
9,700
6,475
Cost per unit
1.39
0.93
Unit variable cost
$0.93
Unit Fixed cost
$1.39
Calculation of unit variable cost & fixed cost
Increase in cost for increase in units
Increase %
Cost
Fixed costs for 7000 units
Calculation
Variable costs for 7000 units
Calculation
Unit Sales
4000
6000
2000
50%
Variable cost
7000
7000
Cost of Food Sold
2000
3000
1000
50%
Variable cost since increase in units % = Increase in % variable cost
-
NA
3,500
100% Variable cost
Depreciation
500
500
0
0%
Fixed cost
500
100% Fixed cost
-
NA
Supplies
500
750
250
50%
Variable cost
-
NA
875
100% Variable cost
Wages and Salaries
5000
5500
500
10%
Semi variable cost
4,000
(5500-(500/2000*6000))
1,750
(500/2000*7000)
Utilities
1400
1500
100
7%
Semi variable cost
1,200
(1500-(100/2000*6000))
350
(100/2000*7000)
Rent
4000
4000
0
0%
Fixed cost
4,000
100% Fixed cost
-
NA
Total
$ 13,400
$ 15,250
9,700
6,475
Cost per unit
1.39
0.93
Unit variable cost
$0.93
Unit Fixed cost
$1.39
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