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221_Solutions_Chap_2_Fa_05

# 221_Solutions_Chap_2_Fa_05 - E2-16 a 4 b 2 c 7 d 5 e 11...

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E2-16 a. 4 f. 9 k. 8 or 12 (Slope of total costs increases.) b. 2 g. 6 l. 3 c. 7 h. 1 m. 10 d. 5 i. 7 e. 11 j. 2 E2-17 a. Discretionary b. Committed c. Discretionary d. Discretionary e. Discretionary f. Committed g. Discretionary E2-18 a. Total Variable Total Costs Total Average Monthly Fixed (Unit × Monthly Unit Volume Costs \$0.40) Costs Cost 100 \$10,000 \$ 40 \$10,040 \$100.40 1,000 10,000 400 10,400 10.40 5,000 10,000 2,000 12,000 2.40 10,000 10,000 4,000 14,000 1.40 b. Because the variable costs remain constant at \$0.40 per unit, an average cost of \$0.60 will occur when the average fixed cost is \$0.20 per unit. This will occur at 50,000 servings per month: \$10,000/\$0.20 = 50,000 servings per month

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