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Ross's company starts a manufacturing project and produces a single product
Ross's company starts a manufacturing project and produces a single product. The schedule for the project's total and per produced each year follows:
| Units Produced | |||
|---|---|---|---|
| Total Costs | (I) 60 | (II) 80 | (III) 100 |
| Variable Costs | P120 | P? | P? |
| Fixed Costs | 600 | ||
| Total Costs | P | P | P |
| Units Produced | |||
|---|---|---|---|
| Costs per Unit | (I) 60 | (II) 80 | (III) 100 |
| Variable Costs | P? | P? | P? |
| Fixed Costs | P? | P? | P? |
Based on the given data:
- - Complete the schedule by filling up correct amounts in the blanks.
- - Determine the expected cost if the company produces 90 units.
Expert Solution
We have Fixed cost = 600 which remain constant and
Variable per unit = 120 / 60 = 2 per unit
| Units | 60 | 80 | 100 | 90 |
|---|---|---|---|---|
| Vatiable @ 2 per unit | 120 | 160 | 200 | 180 |
| Fixed cost | 600 | 600 | 600 | 600 |
| Total cost | 720 | 760 | 800 | 780 |
Answer 2
Total cost = Variable cost + Fixed cost
= (90 * 2 ) + 600 = 780
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