ACG2071 Principles of Managerial AccountingProf Pencle Quiz

ACG2071 Principles of Managerial Accounting-Prof. Pencle Quiz: CH 6 Quiz This Question: 2 pts RUTH ALMONOR Time R 10 of 27 (0 complete This Quiz: 55 pts possi The Akron Slugger Company produces various types of wooden baseball bats. It has calcuiated the average cost per unt of a production level of 8 000 bats to be $12r 522.500 of the total costs are fixed, what is the variable cost of producing each bat? O A. $9.19 B. S281 O C. $12.00 OD. $3 27 F11 F12 F1O F9 F7 F8 F6 F4 F5 F3

Solution

QUESTION – 1

Total Cost of production = Number of Bats produced x Average cost per Bat

= 8,000 Units x $12.00 per bat

= $96,000

Total Variable Cost = Total cost of Production – Fixed Costs

= $96,000 – 22,500

= $73,500

Variable cost of Producing Each Bat = Total Variable costs / Number of Bats produced

= $73,500 / 8,000 Bats

= $9.19 per Bat

Hence, The Answer is “A. $9.19”

QUESTION - 2

Fixed Cost per unit = Total Fixed Costs / Number of units produced

= $62,000 / 90,000 Units

= $0.69 per unit

Hence The Answer us “D. $0.69 per unit”