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Chapter 2 Assignment Solution

# Chapter 2 Assignment Solution - Problem 2-20A(continued c...

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Chapter 2 Homework handed in Problem 2-20A a. Sales Volume in units (a) 100 150 200 250 300 Total cost of software (a x \$200) \$20,000 \$30,000 \$40,000 \$50,000 \$60,000 Total cost of booth rental 7,500 7,500 7,500 7,500 7,500 Total cost of sales (b) \$27,500 \$37,500 \$47,500 \$57,500 \$67,500 Average cost per unit (b ÷ a) \$275 \$250 \$237.50 \$230 \$225 The cost of booth space is fixed. b. Sales Volume 100 150 200 250 300 Average cost per unit (a) \$275 \$250 \$237.50 \$230 \$225 Price per package (a + \$60) \$335 \$310 \$297.50 \$290 \$285
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Unformatted text preview: Problem 2-20A (continued) c. Trade Shows Attended (a) 1 2 3 4 5 Cost of booth rental (a x \$7,500) \$7,500 \$15,000 \$22,500 \$30,000 \$37,500 The cost of booth space is variable. d. The additional cost is \$40 ÷ 50 units = \$0.80 per unit. The cost would be treated as a variable cost for decision making purposes. While it is not purely proportional, its behavior pattern closely approximates a variable cost pattern....
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