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Logan inc plans to double its rental space next year which will increase its fixed cost...

Logan inc plans to double its rental space next year which will increase its fixed cost by 40% while variable costs remain the same. Current year costs are as follows

variable costs $10 per unit

fixed costs $30,000

If next year production is expected to be 20,000 units, estimated total costs will be

A. $242,000

B. $230,000

C. $322,000

D. $212,000

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Answer #1

Answer : A. $242,000 Working Notes: Fixed Cost in Current Year = $30,000 Variable cost per unit = $10 Fixed Cost in Next Year

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