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HW1_2_3sol

# HW1_2_3sol - FC Period VC Period FC Difference = Product...

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ACG 2071 Homework Problems Problem 1 Total costs = Fixed costs + Variable costs \$40,000 = VC + 12,000 so VC = \$28,000 at 6,000 units A. Fixed costs are the same no matter what happens to production/sales levels. Fixed costs = \$12,000 B. Fixed costs = \$12,000 C. Variable costs per unit are the same no matter what level of production/sales. Variable costs + Fixed costs = total costs VC per unit = \$28,000/6,000 = \$4.666666666 per unit = \$4.67 per unit D. VC per unit * 6,300 units = \$4.666666666*6,300 = \$29,400 E. At 6,800 units: VC = \$4.66666 * 6,800 = \$31,733 FC = 12,000 Total cost at 6,600 units \$43,733 Problem 2 Period or Product Variable or Fixed Period FC Product VC Period VC Period FC Period

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Unformatted text preview: FC Period VC Period FC Difference = Product costs are costs to get inventory(products) ready to sell Period costs are all other costs not used to get inventory (products) ready to sell Problem 3 1 A. Opportunity cost \$3,000, the amount given up if manufactured B. Sunk cost \$120,000 C. Product cost \$0.08 per pencil for materials and \$0.04 for labor (overhea D. Not incremental Fixed costs of \$10,800 and depreciation on factory space E. Fixed costs Fixed costs of \$10,800 and depreciation on factory space F. Variable costs \$0.08 materials per pencil, \$0.04 labor per pencil and \$0.01 delivery per pencil ad would also be included here if given)...
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HW1_2_3sol - FC Period VC Period FC Difference = Product...

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