Question

In: Accounting

Adams Company’s cost and production data for two recent months included the following: March April Production...

Adams Company’s cost and production data for two recent months included the following:

March April
Production (units) 300 600
Rent $ 1,700 $ 1,700
Utilities $ 400 $ 800

Required

  1. Separately calculate the rental cost per unit and the utilities cost per unit for both March and April.

  2. Identify which cost is variable and which is fixed.

Separately calculate the rental cost per unit and the utilities cost per unit for both March and April. (Round your answers to 2 decimal places.)

March April
Rent cost per unit
Utility cost per unit

Identify which cost is variable and which is fixed.

Rent cost
Utility cost

Solutions

Expert Solution

March April
Rent cost per unit $              5.67 $ 2.83
Utility cost per unit $              1.33 $ 1.33
Rent cost Fixed cost
Utility cost Variable cost
Workings:
March April
Rent $            1,700 / 300 = $ 5.67 $     1,700 / 600 = $       2.83
Utilities $                400 / 300 = $ 1.33 $         800 / 600 = $       1.33

ekkarill92 answered 2 years ago
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