Question

Relevant Range and Fixed and Variable Costs

Vogel Inc. manufactures memory chips for electronic toys within a relevant range of 114,000 to 182,400 memory chips per year. Within this range, the following partially completed manufacturing cost schedule has been prepared:

Components produced	114,000	144,000	182,400
Total costs:
Total variable costs . . . . . . . . .	$49,020	(d)	(j)
Total fixed costs . . . . . . . . . . . .	54,720	(e)	(k)
Total costs . . . . . . . . . . . . . . . . .	$103,740	(f)	(l)
Cost per unit:
Variable cost per unit . . . . . . .	(a)	(g)	(m)
Fixed cost per unit . . . . . . . . . .	(b)	(h)	(n)
Total cost per unit . . . . . . . . . .	(c)	(i)	(o)

Complete the cost schedule below. When computing the cost per unit, round to two decimal places. Round all other values to the nearest dollar.

Cost Report
Components produced		114,000		144,000		182,400
Total costs:
Total variable costs		$49,020	(d)	$	(j)	$
Total fixed costs		54,720	(e)		(k)
Total costs		$103,740	(f)	$	(l)	$
Cost per Unit
Variable cost per unit	(a)	$	(g)	$	(m)	$
Fixed cost per unit	(b)		(h)		(n)
Total cost per unit	(c)	$	(i)	$	(o)	$

Answer 1

Ans.
	Components produced	114000	144000	182400
	Total costs:
	Total variable costs	49020	61920	78432
	Total Fixed costs	54720	54720	54720
	Total costs	103740	116640	133152
	Cost per unit:
	Variable cost per unit	0.43	0.43	0.43
	Fixed cost per unit	0.48	0.38	0.30
	Total cost per unit	0.91	0.81	0.73
	*Calculations:
	Components produced	114000	144000	182400
	Total costs:
	Total variable costs	49020	(49020/114000*144000)	(49020/114000*182400)
	Total Fixed costs	54720	54720	54720
	*Fixed costs are always remain constant.
	*Total cost = Variable cost + Fixed cost
	Cost per unit:
	Variable cost per unit	(49020/114000)	(61920/144000)	(78342/182400)
	Fixed cost per unit	(54720/114000)	(54720/144000)	(54720/182400)
	*Total cost per unit = Variable cost per unit + Fixed cost per unit