Question

PTCC, Inc. manufacturers copy machines within a relevant range of production of 10,000 to 200,000 units per year. The following partially completed manufacturing cost schedule has been prepared.

Required: Complete the schedule.

Number of units produced:
	10,000	16,000	20,000
Total costs:
Total variable costs	$1,000,000
Total fixed costs	$500,000
Total costs:	$1,500,000
Cost per unit:
Variable cost per unit
Fixed cost per unit
Total cost per unit:

Answer 1

Ans.1		Number of units produced
		10,000	16,000	20,000
	Total costs:
	Variable costs	$1,000,000	$1,600,000	$2,000,000
	Fixed costs	$500,000	$500,000	$500,000
	Total costs	$1,500,000	$2,100,000	$2,500,000
	Cost per unit:
	Variable cost per unit	$100.00	$100.00	$100.00
	Fixed cost per unit	$50.00	$31.25	$25.00
	Total cost per unit	$150.00	$131.25	$125.00
	*Working Notes:
	Variable cost per unit = Variable cost / Number of units produced
	$1,000,000 / 10,000    =    $100 per unit
	*Total fixed cost and Variable cost per unit remain constant on each level of activity.
	Total variable cost =   Variable cost per unit * Number of units produced
	Number of units produced	10,000	16,000	20,000
	Variable cost	$100 * 10,000	$100 * 16,000	$100 * 20,000
	*Fixed cost per unit = Total fixed cost / Number of units produced
	Number of units produced	10,000	16,000	20,000
	Fixed cost per unit	$500,000 / 10,000	$500,000 / 16,000	$500,000 / 20,000