Homework SourseHomework Cost Behavior and Cost Prediction Oct Nov Unit Sale
| Homework: Cost Behavior and Cost Prediction | |||
| Oct | Nov | ||
| Unit Sales | 4,000 | 6,000 | |
| Cost of Food Sold | $ 2,000 | $ 3,000 | |
| Depreciation | 500 | 500 | |
| Supplies | 500 | 750 | |
| Wages and Salaries | 5,000 | 5,500 | |
| Utilities | 1,400 | 1,500 | |
| Rent | 4,000 | 4,000 | |
| Total | $ 13,400 | $ 15,250 | |
| What is the Unit Variable Cost and Fixed Costs? | |||
| Predict the Average and Total Costs for | 7000 | units |
| Homework: Cost Behavior and Cost Prediction | |||
| Oct | Nov | ||
| Unit Sales | 4,000 | 6,000 | |
| Cost of Food Sold | $ 2,000 | $ 3,000 | |
| Depreciation | 500 | 500 | |
| Supplies | 500 | 750 | |
| Wages and Salaries | 5,000 | 5,500 | |
| Utilities | 1,400 | 1,500 | |
| Rent | 4,000 | 4,000 | |
| Total | $ 13,400 | $ 15,250 | |
| What is the Unit Variable Cost and Fixed Costs? | |||
| Predict the Average and Total Costs for | 7000 | units |
Solution
Calculation of unit variable cost & fixed cost
Increase in cost for increase in units
Increase %
Cost
Fixed costs for 7000 units
Calculation
Variable costs for 7000 units
Calculation
Unit Sales
4000
6000
2000
50%
Variable cost
7000
7000
Cost of Food Sold
2000
3000
1000
50%
Variable cost since increase in units % = Increase in % variable cost
-
NA
3,500
100% Variable cost
Depreciation
500
500
0
0%
Fixed cost
500
100% Fixed cost
-
NA
Supplies
500
750
250
50%
Variable cost
-
NA
875
100% Variable cost
Wages and Salaries
5000
5500
500
10%
Semi variable cost
4,000
(5500-(500/2000*6000))
1,750
(500/2000*7000)
Utilities
1400
1500
100
7%
Semi variable cost
1,200
(1500-(100/2000*6000))
350
(100/2000*7000)
Rent
4000
4000
0
0%
Fixed cost
4,000
100% Fixed cost
-
NA
Total
$ 13,400
$ 15,250
9,700
6,475
Cost per unit
1.39
0.93
Unit variable cost
$0.93
Unit Fixed cost
$1.39
| Calculation of unit variable cost & fixed cost | |||||||||
| Increase in cost for increase in units | Increase % | Cost | Fixed costs for 7000 units | Calculation | Variable costs for 7000 units | Calculation | |||
| Unit Sales | 4000 | 6000 | 2000 | 50% | Variable cost | 7000 | 7000 | ||
| Cost of Food Sold | 2000 | 3000 | 1000 | 50% | Variable cost since increase in units % = Increase in % variable cost | - | NA | 3,500 | 100% Variable cost |
| Depreciation | 500 | 500 | 0 | 0% | Fixed cost | 500 | 100% Fixed cost | - | NA |
| Supplies | 500 | 750 | 250 | 50% | Variable cost | - | NA | 875 | 100% Variable cost |
| Wages and Salaries | 5000 | 5500 | 500 | 10% | Semi variable cost | 4,000 | (5500-(500/2000*6000)) | 1,750 | (500/2000*7000) |
| Utilities | 1400 | 1500 | 100 | 7% | Semi variable cost | 1,200 | (1500-(100/2000*6000)) | 350 | (100/2000*7000) |
| Rent | 4000 | 4000 | 0 | 0% | Fixed cost | 4,000 | 100% Fixed cost | - | NA |
| Total | $ 13,400 | $ 15,250 | 9,700 | 6,475 | |||||
| Cost per unit | 1.39 | 0.93 | |||||||
| Unit variable cost | $0.93 | ||||||||
| Unit Fixed cost | $1.39 |
