In: Accounting
Selected financial data for Spark Enterprises follows for a production level of 120,000 units.
Total Fixed Costs $300,000
Total costs (fixed and variable) $ 450,000
a. Calculate the variable cost per unit.
b. if flash corporation makes 75,000 units, calculate the fixed cost per unit.
c. if flash corporation makes 160,000 units, calculate the total variable costs.
d. if flash corporation makes 180,000 units, calculate the total costs.
a)
Total variable cost = Total costs – Total fixed costs
= 450000-300000
= 150000
Variable cost per unit = 150000/120000
= 1.25 per unit
b)
Fixed cost per unit = 300000/75000
= 4 per unit
c)
Total variable cost = 1.25*160000
= 200000
d)
Total variable cost = 1.25*180000
= 225000
Total cost = 225000+300000
= 525000