Jansen Inc. currently produces and sells 12,000 units per year with the following cost data: Variable...

Jansen Inc. currently produces and sells 12,000 units per year with the following cost data:

Variable costs	$10 per unit
Fixed costs	$30,000

Next year, Jansen plans to increase its advertising budget, which will increase fixed costs by 5%. With increased advertising, the company expects the number of units produced and sold to increase by 8%. What are budgeted total costs expected to be next year?

Expert Solution

1. Question is silent about change in Variable cost. So same Variable cost per unit is taken for both years.

2. 2.T second table is provided just for your information about increase in costs for next year.

Hopr you understood the solution. If you have any Doubt please leave your doubt in the comment section. So, that I can clarify your doubt.

Thank you.

ekkarill92 answered 2 years ago

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