Sabina and Associates has the following current year costs:
Variable costs $4 per unit
Fixed costs $20,000
Next year, the company plans to enter into an arrangement with a supplier that will result in a 15% decrease in variable costs. They also plan on reducing their rental space, which will decrease fixed costs by 10%.
A. What will be the new equation to predict total costs?
B. If next year's production is expected to be 10,000 units, what will be total estimated costs?
Your tutorial is in Excel, attached. The formula is mapped out. Click in cells to see the calculation.