Clean Company's costs are a function of sales of its two products: Clean Spray and Clean Powder. Assume its fixed costs are 8,000 dollars per month. Its variable cost per bottle of Clean Spray is 4 dollars, and its variable cost per can of Clean Powder is 3 dollars. If Clean Company sells 200 bottles of Clean Spray and 100 cans of Clean Powder, its Estimated Total Cost for the period would be:
| $9,100 |
| $1,100 |
| $9,000 |
| $8,000 |
Total cost = Fixed cost + Variable cost
Variable cost per bottle of clean spray = $4
Total number of clean spray bottles = 200
Total variable cost to produce & sell 200 clean spray bottles= 200*$4= $800 (A)
Variable cost per can of clean powder = $3
Total number of clean powder cans = 100
Total variable cost to produce and sell 100 clean powder cans= 100*$3= $300 (B)
Total variable cost ( A+B) = $1,100
Total fixed cost = $8,000
Total cost = $9,100
It has been assumed that company sells 200 clean spray bottles and 100 clean powder cans in a month.
Answer is part (a) $9,100
Get Answers For Free
Most questions answered within 1 hours.