Fixed versus variable cost behavior
Not what you're looking for?
Hernandez trophies makes and sells trophies it distributes to little league ballplayers. The company normally produces and sells between 10,000 and 13,000 trophies per year. The following cost data apply to various activity levels.
Number of trophies 10,000 11,000 12,000 13,000
Total Cost Incured
Fixed $60,000
Variable $50,000
Total Costs $110,000
Cost per Unit
Fixed $6.00
Variable $5.00
Total Cost per trophy $11.00
A. Complete the preceding table by filling in the missing amounts for the levels of activity shown in the first row of the table. Round all costs per unit figures to the nearest whole penny.
B. Explain why the total cost per trophy decreases as the number of trophies increases.
Purchase this Solution
Solution Summary
The solution explains how to calculate the total costs and also explains why the cost per trophy decreases as the number of trophies increases.
Purchase this Solution
Free BrainMass Quizzes
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.