Question

Cactus Cookies incurred the following costs this month to manufacture 1,000 jumbo chocolate chip cookies Chocolate chips Flour Butter Sugar Other ingredients Labor wages Rent on manufacturing space Utilities (paid at a fixed monthly rate) Depreciation on kitchen equipment 58.00 $30.00 $61.50 $30.00 $35.00 $ 300.00 $ 300.00 54.00 $ 82.00

Need help with D, E, F, G

Answer 1

d. Fixed Cost per cookie this month:
Fixed Cost items	Amount $
Rent on manufacturing space	300
Utilities (paid at a fixed monthly rate)	54
Depreciation on kitchen equipment	82
Total Fixed Costs	436
Fixed cost per cookie = Total fixed costs/Cookies produced
Fixed cost per cookie = 436/1000 = $0.436 or $0.44 per cookie
e. Total variable cost if 2000 cookies manufactured this month:
Variable Cost items	Amount $
Chocolate chips	58
Flour	30
Butter	61.5
Sugar	30		0.5145
Other ingredients	35
Labor wages	300
Total Variable cost to manuf. 1000 cookies	514.5
Total Variable cost to manuf. 2000 cookies= TVC to manuf. 1000 cookies *2
Total Variable cost to manuf. 2000 cookies=514.50 * 2 = $1029
f. Total fixed cost, had manuf. 2000 cookies = $436 (assumption not operating on capacity)
g. Variable cost per cookie if manuf. 2000 this month = $1029 / 2000 = $ 0.5145 or $0.52 per cookie