Question

5. Vogel Inc. manufactures memory chips for electronic toys within a relevant range of 25,000 to 100,000 memory chips per year. Within this range, the following partially completed manufacturing cost schedule has been prepared:

Memory Chips Produced	30,000	50,000	70,000
Total Variable Costs	$1,500,000	D	J
Total Fixed Costs	1,200,000	E	K
Total Costs	$2,700,000	F	L
Variable Costs per Unit	A	G	M
Fixed Cost Per Unit	B	H	N
Total Cost per Unit	C	I	O

Find the missing amounts for A-O (Show your work!!)

A. ______________
B. ______________
C. ______________

D. ______________
E. ______________
F. ______________
G. ______________
H. ______________
I. _______________
J. ________________
K. _______________
L. _________________
M. _________________
N. _____________________

O. __________________

Answer 1

	30000	50000	70000
Total costs:
Total variable costs	1500000	50000x50 = 2500000	70000x50 = 3500000
Total fixed costs	1200000	1200000	1200000
Total costs	2700000	3700000	4700000
Cost per unit:
Variable cost per unit	1500000/30000= 50	50	50
Fixed cost per unit	1200000/30000 = 40	1200000/50000 = 24	1200000/70000= 17.1428
Total cost per unit	50+40 = 90	50+24 = 74	50+17.1428 = 67.1428

Fixed costs remain the same no matter what is the number of units.

Total costs = Total variable cost + Total fixed costs