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    An accounting magazine sells 50,000 copies a month

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    An accounting magazine sells 50,000 copies a month. The total variable costs are $40,000 and fixed costs are $20,000. An additional one-off storage cost of $2,000 is incurred if production exceeds 55,000 units.

    A management accountant then makes suggestions about which production run to use.

    On behalf of the management accountant, forecast the following costs about which production run to use. This is based upon a production run of (a) 52,000 units and (b) 57,000 units:

    Total variable costs
    Variable cost per unit
    Total fixed cost
    Fixed cost per unit
    Budget Forecast A Forecast B
    Production
    50,000
    52,000
    57,000
    Total variable costs

    Variable cost per unit

    Total fixed cost

    Fixed cost per unit

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    https://brainmass.com/business/accounting/accounting-magazine-sells-copies-month-469543

    Solution Preview

    Dear student,

    Excel spreadsheet using three-column template is provided in the attached file to provide detailed answer to your management question. It contains following three parts.

    1 Budget forcast showing comparative production cost for three level production lines:

    2 Income statement for ...

    Solution Summary

    The management accountant then makes suggestions about which production run to use is determined.

    $2.19

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