A company estimates that its total cost

Question # 00104195 Posted By: echo7 Updated on: 09/17/2015 01:53 PM Due on: 10/17/2015
Subject Business Topic General Business Tutorials:
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Question #1
a) A company estimates that its total cost to send out invoices, receive payments, deposit the
payments, and update accounting records was $10 per sale in 2014. In 2014, there were
10,000 sales and fixed costs of $60,000. In 2015, the company expects total fixed costs
and variable costs per unit to be the same as in 2014. If the company budgets 10,500 sales
in 2015, what are the expected total costs and expected costs per unit for 2015?
b) Assume the same facts as in part a, except the company expects 9,500 sales in 2015.
What are the expected total costs and expected costs per unit for 2015?
Question #2
a) A company estimates that its total cost to acquire materials, set up machines, and produce
products is $25 per unit produced in 2014. In 2014, there were 50,000 units produced and
variable costs per unit produced totaled $15. In 2015, the company expects total fixed
costs and variable costs per unit to be the same as in 2014. If the company budgets to
produce 52,000 units in 2015, what are the expected total costs and expected costs per
unit for 2015?
b) Assume the same facts as in part a, except the company expects to produce 49,000 units
in 2015. What are the expected total costs and expected costs per unit for 2015?
Question #3
The Bear Company collected the following monthly information on units produced and
electricity costs:
Month
January
February
March
April
May
June

Units Produced
50,000
48,000
47,000
54,000
58,000
53,000

Electricity Costs
$78,000
$74,500
$72,000
$81,000
$86,000
$79,500

Using the high-low method, prepare an estimate of electricity costs for July, assuming 53,500
units are expected to be produced in July.
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Tutorials for this Question
  1. Tutorial # 00098562 Posted By: echo7 Posted on: 09/17/2015 01:53 PM
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