Question

In: Accounting

1. Quiz Company incurred costs of $225,000 to produce 50,000 units. The total cost included fixed...

1. Quiz Company incurred costs of $225,000 to produce 50,000 units. The total cost included fixed costs of $100,000.

Determine the total cost to produce 80,000 units.

Note: Give your answer using dollar signs and commas but no decimal points (cents).

2. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Determine the total cost to produce 10,000 units.

3. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Determine the variable cost to produce 10,000 units.

4. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Determine the fixed cost to produce 10,000 units.

5. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units.  Total cost will

a.

Increase

b.

Decrease

c.

Remain unchanged

d.

(This is an incorrect answer because Blackboard requires a minimum of four choices.)

6. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units.  Fixed cost will

a.

Increase

b.

Decrease

c.

Remain unchanged

d.

(This is an incorrect answer because Blackboard requires a minimum of four choices.)

7. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units. Variable cost will

a.

Increase

b.

Decrease

c.

Remain unchanged

d.

(This is an incorrect answer because Blackboard requires a minimum of four choices.)

8. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units. Variable cost per unit will

a.

Increase

b.

Decrease

c.

Remain unchanged

d.

(This is an incorrect answer because Blackboard requires a minimum of four choices.)

9. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units. Fixed cost per unit will

a.

Increase

b.

Decrease

c.

Remain unchanged

d.

(This is an incorrect answer because Blackboard requires a minimum of four choices.)

10. Quiz Company derived the following cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units. Total cost per unit will

a.

Increase

b.

Decrease

c.

Remain unchanged

d.

(This is an incorrect answer because Blackboard requires a minimum of four choices.)

Solutions

Expert Solution

1)Quiz Company incurred costs of $225,000 to produce 50,000 units. The total cost included fixed costs of $100,000

Now we have to calculate variable cost per unit first. Formula is Total Cost/Total units .

It will be $225000/50000 units = $4.5/unit

So variable cost for 80000 units will be 80000 units* $4.5/unit

It wil be $360000

Fixed cost will not change with change in units . So it will be $100000

So Total cost to produce 80000 unit will be $360000+$100000 = $460000

2) Cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

So total cost to produce 10000 units will be :

Cost = $5.5 * 10000 units + $25000 = $80000

So total cost to produce 10000 units = $80000

3) Cost formula for the monthly production of its product :

Cost = $5.50 x Number of units + $25,000

Total Variable cost to produce 10000 units wil be Variable cost per unit * Total Units

It will be $5.5/unit * 10000 = $55000

Total Variable cost to produce 10000 units = $55000

4) Cost formula for the monthly production of its product :

Cost = $5.50 x Number of units + $25,000

Fixed cost to produce 10,000 units will be $25000. Total Fixed cost will not change with change in units.

5) Cost formula for the monthly production of its product :

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units

So total cost for 10000 units is $5.5/unit *10000 units + $25000 = $80000

Total cost for 15000 units is $5.5/unit *15000 units + $25000 = $107500

So total cost will Increase when production increses from 10000 units to 15000 units

So the answer is Option ' a '

6) Cost formula for the monthly production of its product :

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units.  

Total Fixed cost will not change with change in units.

So the answer is option 'c'



7) Cost formula for the monthly production of its product:

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units.

Variable cost for 10000 units = 10000 unit *$5.5/unit = $55000

Variable cost for 15000 units = 15000 unit *$5.5/unit = $82500

Variable cost will increase when production increase from 10000 units to 25000 units

So the answer is option 'a'

8) Cost formula for the monthly production of its product :

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units

Variable cost for 10000 units = 10000 unit *$5.5/unit = $55000. So per unit cost will be $55000/10000 units = $5.5/unit

Variable cost for 15000 units = 15000 unit *$5.5/unit = $82500. So per unit cost will be $82500/15000 units = $5.5/unit

So Variable cost per unit remain unchanged when production increase from 10000 untis to 15000 units

So the answer is option 'c'

9) Cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units.

Fixed cost for 10000 units =$25000 . So per unit fixed csost will be $25000/10000 units = $2.5/unit

Fixed cost for 15000 units = $25000. So per units cost will be $25000/15000 units = $1.67/unit

So Fixed cost per unit decreases when production increase from 10000 units to 15000 units.

So the answer is option 'b'

10) Cost formula for the monthly production of its product.

Cost = $5.50 x Number of units + $25,000

Suppose production increases from 10,000 units to 15,000 units.

Total Cost = Variable cost + Fixed cost

Total Cost for 10000 units ($5.5/unit * 10000 units ) + $25000 = $80000. So total cost per unit will be $80000/10000 units = $8/unit

Total Cost for 15000 units ($5.5/unit * 15000 units ) + $25000 = $107500. So total cost per unit will be $107500/15000 units = $7.17/unit

So total cost per unit will decrease when production increase from 10000 units to 15000 units

So our answer is option 'b'


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