HELP WITH ACCOUNTING?

Copper Hill Inc. manufactures laser printers within a relevant range of production of 50,000 to 70,000 printers per year. The following partially completed manufacturing cost schedule has been prepared:

Number of Printers Produced

70,000 90,000 100,000

Total costs:

Total variable costs $350,000 (d) (j)

Total fixed costs 630,000 (e) (k)

Total costs $980,000 (f) (l)

Cost per unit:

Variable cost per unit (a) (g) (m)

Fixed cost per unit (b) (h) (n)

Total cost per unit (c) (i) (o)

Complete the preceding cost schedule, identifying each cost by the appropriate letter (a) through (o).

1 Answer

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  • JKRB
    Lv 7
    9 years ago
    Favorite Answer

    Normally if production exceeds the maximum relevant range, variable costs per unit would increase because of such things as overtime pay. Fixed costs per unit might also increase because of added machinery costs, utilities, supervision, etc. But since no information is given on those types of items, we can only calculate on what we are given.

    Since the maximum relevant range is 70,000, fixed cost per unit will remain the same but total fixed costs will rise in relation to how many printers are produced. Variable costs per unit will remain the same, but total variable costs will also rise in relation to how many units are produced.

    Number of Printers Produced

    70,000 90,000 100,000

    Total costs:

    Total variable costs $350,000 (d) 90,000 x 5 = $450,000 (j) 100,000 x 5 = $500,000

    Total fixed costs 630,000 (e) 90,000 x 9 = $810,000 (k) 100,000 x 9 = $900,000

    Total costs $980,000 (f) $1,260,000 (l) $1,400,000

    Cost per unit:

    Variable cost per unit (a) 350,000 / 70,000 = $5 (g) $5 (m) $5

    Fixed cost per unit (b) 630,000 / 70,000 = $9 (h) $9 (n) $9

    Total cost per unit (c) $14 (i) $14 (o) $14

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