Question

1. Define the terms total fixed costs, total variable costs, and total costs.

Answer #1

E22-1.
Define and classify variable, fixed, and mixed
costs.
(LO 1)
Bonita Company manufactures a single product. Annual production
costs incurred in the manufacturing process are shown below for two
levels of production.
Costs Incurred
Production in Units
5,000
10,000
Production Costs
Total
Cost
Cost/Unit
Total
Cost
Cost/Unit
Direct materials
$8,000
$1.60
$16,000
$1.60
Direct labor
?9,500
?1.90
?19,000
?1.90
Utilities
?2,000
?0.40
??3,300
?0.33
Rent
?4,000
?0.80
??4,000
?0.40
Maintenance
???800
?0.16
??1,400
?0.14
Supervisory salaries
?1,000
?0.20
??1,000...

Define and know how to calculate the following variables: fixed
cost, variable costs, total cost, average fixed cost, average
variable cost, average total cost, and marginal cost.

Define fixed and variable costs. Give examples of each. Can a
company budget for variable costs? Explain

Quantity
Total costs
Total variable costs
Marginal costs
Average total costs
Average variable costs
Average fixed costs
1
$20
2
$6
$5
3
$21
4
$10.50
$2.50
5
$9
Given the table, what is the marginal cost of producing the
fourth unit?
a. $20
b. $10
c. $5
d. $11
e. #31.50

Sunland Corp. had total variable costs of $193,800, total fixed
costs of $133,300, and total revenues of $340,000.
Compute the required sales in dollars to break even.
Required sales
$
Amanda Company reports the following total costs at two levels
of production.
Classify each cost as variable, fixed, or mixed.
5,000 Units
10,000 Units
Indirect labor
$ 3,000
$ 6,000
Fixed CostsMixed CostsVariable Costs
Property taxes
7,000
7,000
Fixed CostsMixed CostsVariable Costs
Direct labor
28,000
56,000
Fixed CostsMixed CostsVariable Costs...

Variable costs equal fixed costs
when nothing is produced, while average total costs equals average
fixed costs when nothing is produced.
which one:
True
False

Eastland Corp. had total variable costs of $150,000, total fixed
costs of $120,000, and total revenues of $250,000.
(a1)
Your answer is correct.
Calculate contribution margin ratio.
Contribution margin ratio
%
SHOW SOLUTION
SHOW ANSWER
LINK TO TEXT
Attempts: 1 of 5 used
(a2)
Compute the required sales in dollars to break even.
Required sales
$

Calculate the total fixed costs, the variable costs per
taco sold, and the number of tacos needed to sell in order to turn
a $2,000 profit according to the data given in class.
Total Fixed Costs: Add all fixed MONTHLY costs (break
down any annual costs to monthly)
Total Variable Costs: Add all variable PER UNIT costs
(break everything down to a cost per unit made or
sold)
Taco Stand Case Study:
Rent for your Stand - $600/month
Meat for...

11. Define the Marginal Cost, Average Total cost, Average
Variable cost, Average fixed cost?

(a) Calculate marginal costs, total costs, average fixed costs,
average variable costs and average total costs, given the following
table. Fixed costs are $100.
Output
Total Variable Cost
Marginal Cost
Total Cost
Average Fixed Cost
Average Variable Cost
Average Total cost
0
0
1
60
2
90
3
110
4
150
5
230
6
450
7
610
8
810
(b) Between what levels of output is there increasing marginal
productivity?
(c) If labour were the only input to this production...

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