1)

If apple decides to sell further under the Apple brand name, it is engaging in

Brand Extention

Because it is engaging in using the well developed image of a brand name under a different product category

2)

Answer)

	Units Produced and Sold
	15,000	20,000	25000
Total Costs
Variable Cost	67,500	90,000	112,500
Fixed Cost	150,000	150,000	150,000
Total Costs	217,500	240,000	262,500
Cost Per unit
Variable cost	4.50	4.50	4.50
Fixed Cost	10.00	7.50	6.00
Total Cost	14.50	12.00	10.50

Working Notes:

Number of units Produced and Sold: 15,000

Variable cost per unit = Total Variable cost/ number of units produced and sold

                                        = 67,500/ 15,000 units

                                        = 4.50 per unit

Fixed cost per unit = Total fixed cost/ number of units produced and sold

                                    = 150,000/ 15,000 units

                                     = 10.00 per unit

Total cost per unit = Variable cost per unit + Fixed Cost per unit

                                  = 4.50 per unit + 10.00 per unit

                                  = 14.50 per unit

Number of units Produced and Sold: 20,000

Variable Cost per unit: Variable cost per unit will remain same, i.e., 4.50 per unit irrespective of the level of output.

Total Fixed Cost: Total Fixed cost as the name suggests will remain irrespective of the level of output. Thus, total fixed cost will remain same, i.e., 150,000.

Fixed cost per unit = Total fixed cost/ number of units produced and sold

                                    = 150,000/ 20,000 units

                                     = 7.50 per unit

Total cost per unit = Variable cost per unit + Fixed Cost per unit

                                  = 4.50 per unit + 7.50 per unit

                                  = 12.00 per unit

Total Variable cost = Variable cost per unit X Number of units produced

                                   = 4.50 per unit X 20,000 units

                                   = 90,000

Total Costs = Total Variable cost + total Fixed Cost

                      = 90,000 + 150,000

                      = 240,000

Number of units Produced and Sold: 25,000

Variable Cost per unit: Variable cost per unit will remain same, i.e., 4.50 per unit irrespective of the level of output.

Total Fixed Cost: Total Fixed cost as the name suggests will remain irrespective of the level of output. Thus, total fixed cost will remain same, i.e., 150,000.

Fixed cost per unit = Total fixed cost/ number of units produced and sold

                                    = 150,000/ 25,000 units

                                     = 6.00 per unit

Total cost per unit = Variable cost per unit + Fixed Cost per unit

                                  = 4.50 per unit + 6.00 per unit

                                  = 10.50 per unit

Total Variable cost = Variable cost per unit X Number of units produced

                                   = 4.50 per unit X 25,000 units

                                   = 112,500

Total Costs = Total Variable cost + total Fixed Cost

                      = 112,500 + 150,000

                      = 262,500