Question

pkease help!! answer is NOT 25 or 28 or 250!!

Required information [The following information applies to the questions displayed below.) George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the company's products, a platinum diving watch, goes through an etching process. The company has recorded etching costs as follows over the last six weeks: Week Units Total Etching Cost $ 13 $ 120 For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost per week 3. If the company processes five units next week, what would be the expected total etching cost? (Round your intermediate calculations and final answer to 2 decimal places.) Expected total etching cost $ 25.00

Answer 1

Expected total etching cost	=	$         20.50
Workings:
		Week	units	Total Etching cost
High Activity	=	3	8	$             25
Low Activity	=	6	2	$             16
Difference	=		6	$               9
Variable cost per unit	=	Difference in total cost / Difference in activity
	=	$9 / 6
	=	$            1.50	per unit
Fixed Cost	=	Total cost - Variable cost
	=	$25 - ($1.50 X 8)
	=	$               13	per month
Expected etching cost for 5 units	=	(5 X $1.50) + $13
	=	$         20.50