1. A firm is reviewing a project with labor cost of $9.90 per unit, raw materials cost of $22.63 a unit, and fixed costs of $8,000 a month. Sales are projected at 10,000 units over the three-month life of the project. What are the total variable costs of the project?

2. Which of the following statements concerning variable costs is (are) correct?
I. Variable costs minus fixed costs equal marginal costs.
II. Variable costs are equal to zero when production is equal to zero.
III. An increase in variable costs increases the operating cash flow.
II only
III only
I and III only
II and III only
I and II only

Solution Preview

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Labor costs = 9.90 per unit x 10,000 units = 99,000
Raw materials = 22.63 ...

Solution Summary

This solution provides the correct answers with explanations to the two variable cost multiple choice questions presented.

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Q 0 1 2 3 4 5 6 7 8 9
TC 5 7 8 10 14 20 28 38

I am having trouble calculatingvariablecost per unit. For example if I am selling hamburgers. My raw materials cost on an annual basis is $650 per 1000 units sold annually. What i am having trouble with is if my annual units rise to 6000 units per year sold, how can I accurately calculate my variablecost. I know my costs will

Calculate the following short-run costs for a firm:
Q = 0, TC = 20: what is the fixed cost?
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Manufacturing costs:
Fixed overhead $200,000
Variable Overhead $4.00 per Tent
Direct Labor $16.00 per Tent
Direct Materials $40 per tent
Beg. Inv. 0
Tents Produced 10,000
Tents Sold 9,000
Selling and admin costs.
Fixed $400,000
Variable $6 p

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Total Product Total Fixed Cost Total VariableCost
0 $0
1

If the formula for calculating net income (profit) using fixed costs (fc), variablecost (Vc), price (P), and units sold (u) is NI=U(P-Vc)-Fc, then if the profits of a company are $100 when sales are $1000 (100 units at $10 each) and $80 when sales are $800 (80 units at $10 each), what formula is used to determine fixed cost and

Please help me understand and explain this problem:
NI = [U * (P-VCu)] - FC
Example: We own a small ice cream shop. What are the variables in this equation?
How is variablecost defined and what might be some variablecosts for our ice cream shop?
How is fixed costs defined and what might be some fixed costs for our i