Silver Company is a food manufacturer and produced 15,000 units of its product this year. Total fixed costs were $45,000 ($3.00/unit) and total variable costs were $60,000 ($4.00/unit). If Silver were to produce 20,000 units, it would need to rent an additional building to have room for the additional capacity. The rent on the additional building would be $10,000 per year. At a production level of 20,000 units, what would be the total costs (fixed and variable) incurred by Silver Company this year?
At production level | 20,000 | |
Variable Costs | 80,000 | =20000*4 |
Fixed Costs | 55,000 | =45000+10000 |
Total Costs ( Fixed & variable ) | $ 135,000 | |
Silver Company is a food manufacturer and produced 15,000 units of its product this year. Total...
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