Question

In: Accounting

1. Test Company derived the following cost function for the production of its product. Cost =...

1. Test Company derived the following cost function for the production of its product.

Cost = $16,000 + $10X, where x is the number of units.

Next month, Test Company expects to produce 4,000 units.

Determine the total cost per unit to produce 4,000 units.

Note: Give your answer using dollar signs and state your answer to the nearest cent.

Example: $12.34 or $12.00

2.

Next month, Test Company expects to produce 4,000 units.

Suppose production is less than expected so that Test Company only produces 3,500 units. Total cost will

a.

Increase
b.

Decrease
c.

Remain unchanged
d.

A incorrect answer because Blackboard requires four choices

3.

Next month, Test Company expects to produce 4,000 units.

Suppose production is less than expected so that Test Company only produces 3,500 units. Total variable cost will

Increase

Decrease

Remain unchanged

An incorrect answer because Blackboard requires four choices

4.

Next month, Test Company expects to produce 4,000 units.

Suppose production is less than expected so that Test Company only produces 3,500 units. Total fixed cost will

Increase

Decrease

Remain unchanged

An incorrect answer because Blackboard requires four choices

5.

Next month, Test Company expects to produce 4,000 units.

Suppose production is less than expected so that Test Company only produces 3,500 units. Variable cost per unit will

Increase

Decrease

Remain unchanged

An incorrect answer because Blackboard requires four choices

6.

Suppose production is less than expected so that Test Company only produces 3,500 units. Fixed cost per unit will

Increase

Decrease

Remain unchanged

An incorrect answer because Blackboard requires four choices

7.

Next month, Test Company expects to produce 4,000 units.

Suppose production is less than expected so that Test Company only produces 3,500 units. Total cost per unit will

Increase

Decrease

Remain unchanged

An incorrect answer because Blackboard requires four choices

Solutions

Expert Solution

1. Total cost = $56,000

2. b. Decreases

3. Decreases.

4. Remain Unchanged

5. Remain unchanged

6. Increase

7. Increase

Working notes

ekkarill92 answered 1 year ago
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