Question

Vogel Inc. manufactures memory chips for electronic toys within a relevant range of 25,000 to 100,000 memory chips per year. Within this range, the following partially completed manufacturing cost schedule has been prepared: Memory Chips Produced 40,000 60,000 90,000 Total Variable Costs $1,400,000 D J Total Fixed Costs 800,000 E K Total Costs $2,200,000 F L Variable Costs per Unit A G M Fixed Cost Per Unit B H N Total Cost per Unit C I O Find the missing amounts for A-O A. ______________ B. ______________ C. ______________ D. ______________ E. ______________ F. ______________ G. ______________ H. ______________ I. _______________ J. ________________ K. _______________ L. _________________ M. _________________ N. _____________________ O. __________________

Answer 1

Answer and Explanation:

The computation of the missing amount is as follows

Components produced 40,000 60,000 90,000

Total cost

Total variable cost $1,400,000 $2,100,000 $3,150,000

(60,000 × $35) (90,000 × $35)

Total fixed cost $800,000 $800,000 $800,000

Total cost $2,200,000 $2,900,000 $3,950,000

Cost per unit

Variable cost per unit $35 $35 $35

($1,400,000 ÷ 40,000)

Fixed cost per unit $20 $13.33 $8.89

($800,000 ÷ 40,000) ($800,000 ÷ 60,000) ($800,000 ÷ 90,000)

Total cost per unit $55 $46.33 $43.89

The total cost per unit come from

= Variable cost per unit + fixed cost per unit