Question

Canada Croon Co is based in Collingwood, Ontario. They produce recordings of owl and other bird calls that are sold around the world. The cost driver is the number of recordings made. Zoology students on summer job programs form the majority of the direct labour pool and are paid on an hourly basis. Other office workers are salaried.

Canada Croon Co has been tracking its utility costs including heat, hydro and water and has found that the costs are represented by the following formula:

Utility costs = $20,000 + $2.00 X

where X is the number of recordings made. Last year the company made 6,000 recordings. Actual utility costs for the year were as expected.

Use the above information to answer all of the following questions.

Question 10 (0.5 points)

Question 10 options:

What was the total utility cost for last year?

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Question 11 (0.5 points)

Question 11 options:

What was the total fixed utility cost for last year?

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Question 12 (0.5 points)

Question 12 options:

What was the total variable utility cost for last year?

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Question 13 (0.5 points)

Question 13 options:

What was the utility cost per unit manufactured last year?

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Question 14 (0.5 points)

Question 14 options:

What was the fixed utility cost per unit last year?

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Question 15 (0.5 points)

Question 15 options:

What was the variable utility cost per unit last year?

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Question 16 (0.5 points)

Question 16 options:

What would the total utility cost be if NO units were made this year because the factory was closed all year due to a pandemic?

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Question 17 (0.5 points)

Question 17 options:

What would the total fixed utility cost be if NO units were made this year due to a pandemic?

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Question 18 (0.5 points)

Question 18 options:

What would the total variable utility cost be if NO units were made this year due to a pandemic?

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Question 19 (0.5 points)

Question 19 options:

How many units would be manufactured this year if the factory was closed due to a pandemic?

Answer 1

Requirement 10:

Total Utility cost Last year = $20,000 + ($2 * 6,000 recordings)

= $20,000 + $12,000

= $32,000

Requirement 11:

Total Fixed utility cost last year = $20,000

Requirement 12:

Total Variable cost last year = $2 * 6,000 recordings i.e. $12,000

Requirement 13:

Utility cost per unit manufactured = Total utility cost / Number of recordings

= $32,000 / 6,000 recordings

= $5.33

Requirement 14:

Fixed Utility Cost per unit = Fixed Utility Cost / Number of recordings

= $20,000 / 6,000 recordings

= $3.33

Requirement 15:

Variable Utility cost per unit = $2 (frok cost equation)

Requirement 16:

Total Utility cost = $20,000 + ($2 * Zero units)

= $20,000

Requirement 17:

Fixed Utility Cost = $20,000 (remains constant)

Requirement 18:

Variable Utility Cost = $2 * zero units

= $0

Requirement 19:

If the factory is closed due to pandemic, the production will be ZERO units.

Production this year = 0 units