Question

Solomon Company makes fine jewelry that it sells to department stores throughout the United States. Solomon is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow. Bracelet A Bracelet B Cost of materials per unit $ 37 $ 48 Cost of labor per unit 50 50 Advertising cost per year 8,200 7,600 Annual depreciation on existing equipment 5,700 4,400 Required Identify the fixed costs and determine the amount of fixed cost for each product. Identify the variable costs and determine the amount of variable cost per unit for each product. Identify the avoidable costs and determine the amount of avoidable cost for each product.

Identify the fixed costs and determine the amount of fixed cost for each product.

Required A

Fixed Costs	Bracelet A	Bracelet B
Total fixed costs

Required B

Identify the variable costs and determine the amount of variable cost per unit for each product.

Variable Costs	Bracelet A	Bracelet B
Total variable costs per unit

Required C

Identify the avoidable costs and determine the amount of avoidable cost for each product.

Avoidable Costs	Bracelet A	Bracelet B

Answer 1