Number of attendees 0 100 200 300 400 500 600 total

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Number of attendees 0 100 200 300 400 500 600 Total costs (fixed + variable) $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 Costs per attendee (total costs number attendees) $20.00 $12.50 $10.00 $ 8.75 $ 8.00 $ 7.50 As shown in the table above, for 100 attendees the total cost will be $2,000 and the cost per attendee will be $20. 3. As shown in the table in requirement 2, for 500 attendees the total cost will be $4,000 and the cost per attendee will be $8. Number of attendees 0 100 200 300 400 500 600 Variable cost per person ($10 caterer charge $5 student door fee) $5 $5 $5 $5 $5 $5 $5 Fixed Costs $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Variable costs (number of attendees x variable cost per person) 0 500 1,000 1,500 2,000 2,500 3,000 Total costs (fixed + variable) $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500
2-10 4. Using the calculations shown in the table in requirement 2, we can construct the cost-per- attendee graph shown below: $7.00 $9.00 $11.00 $13.00 $15.00 $17.00 $19.00 $21.00 0 100 200 300 400 500 600 700 Number of Attendees Cost per Attendee ($) As president of the student association requesting a grant for the party, you should not use the per unit calculations to make your case. The person making the grant may assume an attendance of 500 students and use a low number like $8 per attendee to calculate the size of your grant. Instead, you should emphasize the fixed cost of $1,500 that you will incur even if no students or very few students attend the party, and try to get a grant to cover as much of the fixed costs as possible as well as a variable portion to cover as much of the $5 variable cost to the student association for each person attending the party.
2-11 2-26 (15 min.) Total costs and unit costs. 1. (a) $100,000 2,000 = $50.00 per package (b) $100,000 6,000 = $16.67 per package (c) $100,000 10,000 = $10.00 per package (d)[$100,000 (10,000 × $8)] ÷ 20,000 = $180,000 20,000 = $9.00 per package The unit cost to ECG decreases on a per-unit base due to the first $100,000 payment being a fixed cost. The $8 amount per package beyond 10,000 units is a variable cost. The cost function is ECG should not use any of the unit costs in requirement 1 when predicting total costs. Up to 10,000 units, the total cost is a fixed amount. Beyond 10,000 units, the total cost is a combination of a fixed amount plus a per-unit (beyond 10,000 unit) variable amount. The total costs at different volume levels cannot be predicted by using the unit cost at a specific volume level. The total cost should be predicted by combining the total fixed costs and total variable costs rather than multiplying a unit cost amount by the predicted number of packages sold. $180,000 $260,000 $100,000 $100,000 $200,000 $300,000 10,000 20,000 30,000 Total Costs Packages Sold Formatted: Font: 11 pt Formatted: Font: 11 pt Formatted: Font: 11 pt
2-12 2-27 (20 30 min.) Inventoriable costs versus period costs. 1. Manufacturing-sector companies purchase materials and components and convert them into different finished goods. Merchandising-sector companies purchase and then sell tangible products without changing their basic form. Service-sector companies provide services or intangible products to their customers for example, legal advice or audits. Only manufacturing and merchandising companies have inventories of goods for sale. 2. Inventoriable costs are all costs of a product that are regarded as an asset when they are

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