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Category > Management Posted 09 Oct 2017 My Price 7.00

Lovvern Trophies

Exercise 11-6    Fixed versus variable cost behavior

Lovvern 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.

 

 

Number  of Trophies

8,000

10,000

12,000

14,000

Total costs incurred

 

 

 

 

Fixed

$42,000

 

 

 

Variable

42,000

 

 

 

Total costs

$84,000

 

 

 

Cost per unit

 

 

 

 

Fixed

$ 5.25

 

 

 

Variable

5.25

 

 

 

Total cost per trophy

$10.50

 

 

 

Required

a.     Complete the preceding table by filling in the missing amounts for the levels of activity shown in the first row of the table. Round all cost per unit figures to the nearest whole penny.

b.     Explain why the total cost per trophy decreases as the number of trophies increases.

 

 

 

Answers

Maurice Tutor
(5)
Status NEW Posted 09 Oct 2017 05:10 PM My Price 7.00

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