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 monthly rate) Depreciation on kitchen equipment $ 55.00 $ 35.00 $ 67.50 $ 36.00 $ 31.00 $350.00 $ 300.00 $ 60.00 $ 90.00 Calculate each of the following: a. The total variable cost this month. (Round your answer to 2 decimal places.) Total Variable Cost b. The total fixed cost this month. Total Fixed Cost c. The variable cost per cookie this month. (Round your answer to 4 decimal places.) Variable Cost

Answer 1

Ans. A	Particulars	Amount
	Chocolate chips	$55.00
	Flour	$35.00
	Butter	$67.50
	Sugar	$36.00
	Other ingredients	$31.00
	Labor wages	$350.00
	Total variable cost	$574.50
Ans. B	Particulars	Amount
	Rent on manufacturing space	$300.00
	Utilities (paid at a monthly rate)	$60.00
	Depreciation on kitchen equipment	$90.00
	Total fixed cost	$450.00
Ans. C	Total variable cost per cookie = Total variable cost / Number of cockies manufactured
		$574.50 / 1,000
		$0.5745	per cookie
Ans. D	Total fixed cost per cookie = Total fixed cost / Number of cockies manufactured
		$450 / 1,000
		$0.45
Ans. E	Total variable cost   = Cookies manufactured * Variable cost per cookie
		2,000 * $0.5745
		$1,149
Ans. F	Total fixed cost always remains constant on each level of activity.
	Total fixed cost   =   $450
Ans. G	Total variable cost per unit (cookie) always remains constant on each level of activity.
	Total variable cost per cookie = $0.5745 per cookie
Ans. H	Total fixed cost per cookie = Total fixed cost / Number of cockies manufactured
		$450 / 2,000
		$0.225	per cookie