Calculate the fixed cost,variable cost & changes in scenario

5. Calculate the unknowns for the following independent situations. All given activity levels are within the relevant range.

A) Total fixed costs for Company A are $250,000. Total costs, both fixed and variable, are $378,000 for Company A when 40,000 units are produced.

Calculate:
1) variable cost per unit
2) fixed cost per unit

B) Total fixed costs for Company Z are $200,000. Total costs, both fixed and variable, are $450,000 if 125,000 units are produced.

Calculate:
1) variable cost per unit
2) fixed cost per unit if 125,000 units are produced
3) total variable costs if production decreases to 100,000 units

C) Total variable costs are $300,000 if 50,000 units are produced. Total fixed costs are $150,000 if 35,000 units are produced.

Calculate:
1) unit variable cost
2) fixed cost per unit if 35,000 units are produced
3) total variable costs if 35,000 units are produced

Solution Preview

A. Variable Cost = Total cost - Fixed cost = 378000 - 250000 = 128000

Variable cost per unit = 128000/40000 = $3.20
Fixed cost per unit = ...

Solution Summary

The solution calculates the fixed costs, variable costs and changes in scenarios.

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