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Shingle Enterprises

Price: $1.99


Shingle Enterprises is considering manufacturing a new product. It projects the cost

of direct materials and rent for a range of output as shown below.

Output in UnitsRent ExpenseDirect Materials
1,000$5,000 $4,000
2,0005,0007,200
3,0008,0009,000
4,0008,00012,000
5,0008,00015,000
6,0008,00018,000
7,0008,00021,000
8,0008,00024,000
9,00010,00029,300
10,00010,00035,000
11,00010,00044,000

(a) Determine the relevant range of activity for this product.
(b) Calculate the variable costs per unit within the relevant range.
(c) Indicate the fixed cost within the relevant range.

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