Question

Exercise 11-6A (Algo) Fixed versus variable cost behavior LO 11-1, 11-2 Stuart Trophies makes and sells trophies it distributes to little league ballplayers. The company normally produces and sells between 8,000 and 14,000 trophies per year. The following cost data apply to various activity levels. Required Complete the preceding table by filling in the missing amounts for the levels of activity shown in the first row of the table. (Round your intermediate calculations and per unit amounts to 2 decimal places.) 10,000 12,000 14,000 Number of Trophies 8,000 Total costs incurred Fixed $ 48,000 Variable 42,000 Total costs $ 90,000 Cost per unit Fixed $ 6.00 Variable 5.25 Total cost per trophys 11.25

Answer 1

8000 10000 12000 14000 trophies No. of trophies Total Cost Incurred Fixed Cost Variable Cost Total Cost 48000 48000 48000 42000 52500 63000 111000 48000 $ 73500 $ 121500 $ 90000 100500 Cost Per Unit 6.00 4.80 Fixed Variable Total Cost Per trophy 5.25 5.25 4.00 5.25 9.25 3.43 $ 5.25$ 8.68 $ 11.25 10.05 Fixed Cost per Unit =(Fixed Cost/No of trophoes) Variable Cost per Unit =(Variable Cost/No of trophoes) Variable cost per unit remains constant fixed cost remains constant

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