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Copper Hill Inc. manufactures laser printers within a relevant range of production of 70,000 to 100,000 printers per year. The following partially completed manufacturing cost schedule has been prepared:
Complete the following cost schedule: Round your answers to two decimal places.
Number of Printers Produced 70,000 90,000 100,000 Total costs: Total variable costs $350,000 $fill in the blank 1 $fill in the blank 2 Total fixed costs 630,000 $fill in the blank 3 $fill in the blank 4 Total costs $980,000 $fill in the blank 5 $fill in the blank 6 Cost per unit: Variable cost per unit $fill in the blank 7 $fill in the blank 8 $fill in the blank 9 Fixed cost per unit $fill in the blank 10 $fill in the blank 11 $fill in the blank 12 Total cost per unit $fill in the blank 13 $fill in the blank 14 $fill in the blank 15

Sagot :

Answer:

                                    70,000                90,000                        100,000

Total variable costs     $350,000         $450,000                     $500,000

Total fixed costs          $630,000            $630,000                    $630,000

Total Costs                    $980,000           $1,080,000                  $1,130,000

variable costs per unit    $5                      $5                                 $5

fixed cost costs per unit  $9                      $7                                 $6.30

total cost per unit             $14                     $12                                $11.30

Explanation:

Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments

If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output.  

Hourly wage costs and payments for production inputs are variable costs

Variable costs are costs that vary with production

If a producer decides not to produce any output, there would be no need to hire labour and thus no need to pay hourly wages.  

fixed cost would remain the same regardless of the number of output. Fixed cost would be $630,000 for 90,000 and 10,000 unit of output

fixed cost per unit = total fixed cost / output

$630,000 / 70,000 = $9

$630,000 / 90,000 = $7

$630,000 / 100,000 = $6.30

to determine the total variable cost for quantities, 90,000 and 10,000, the average variable cost has to be determined

Average variable cost = total variable cost / output

$350,000 / 70,000 = $5

Average total cost = average fixed cost + average variable cost

total variable cost for output 90,000 = $5 x 90,000 = $450,000

total variable cost for output 100,000 = $5 x 100,000 = $500,000

total cost = total fixed cost + total variable cost

total cost for output 90,000 = $450,000 + $630,000 = $1,080,000

total cost for output 100,000 = $500,000 + $630,000 = $1,130,000

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