The highest value of total cost was $800,000 in June for Mantilla Beverages, Inc Its lowest value of total cost was $510,000 in December

The company makes a single product. The production volume in June and December were 13,000 and 8,000 units, respectively. What is the fixed cost per month? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)
A) $510,000
B) $290,000
C) $46,000
D) $8,000


C .C)
Variable cost per unit = Change in total cost / Change in volume of activity
Variable cost per unit = (Highest cost - Lowest cost) / (Highest volume - Lowest volume)

Change in total cost (A) $290,000
Change in volume of activity (B) 5,000
Variable cost per unit (A / B) $58.00

Total costs for June
Total variable costs for June (58.00 x 13,000 ) 754,000
Fixed costs for June ($800,000 - 754,000 ) $46,000

Business

You might also like to view...

The ______________________________ summarizes the implementation activities and provides documentation for operating the new system and for conducting the post-implementation review and systems maintenance

Fill in the blank(s) with correct word

Business

What is a mediated interview? What are some benefits and challenges to this type of interview?

What will be an ideal response?

Business

Standard costs can be used by management to assess the reasonableness of actual costs incurred.

Answer the following statement true (T) or false (F)

Business

Service businesses provide services for income, while a merchandising business sells merchandise

Indicate whether the statement is true or false

Business