Cactus Cookies incurred the following costs this month to manufacture 1,000 jumbo chocolate chip cookies.
1 answer:
Answer:
Step-by-step explanation:
a. The total variable cost this month :
Chocolate chips = $59.00
Flour = $41.00
Butter = $62.50
Sugar = $32.00
Other ingredients = $34.00
Labor wages = $400.00
Total variable cost this month = (59+41+62.50+32+34+400)
= $628.50
b. The total fixed cost this month :
Rent on manufacturing space = $350.00
Utilities = $58.00
depreciation on kitchen equipment = $89.00
Total fixed cost this month = (350+58+89)
= $497
c. The variable cost per cookie this month :
Total variable cost per cookie this month =
=
= $0.6285
d. The fixed cost per cookie this month :
Total fixed cost = $497
Total number of cookies = 1000
Total fixed cost per cookies =
=
= 0.497 ≈ $0.5
e. The total variable cost if 2000 cookies this month :
Variable cost per cookie = $0.6285
so, total variable cost for 2000 cookies = (0.6285 × 2000)
= $1257
f. Total fixed cost if 2000 cookies :
Total fixed cost would be same even if 1000 cookies or 2000 cookies. because fixed cost is incurred irrespective of the number of the unit produced.
g. The variable cost per cookie for 2,000 cookies :
variable cost for 2000 cookies = $1,257
So variable cost per cookie =
= $0.6285
h. The fixed cost per cookie for 2000 cookie :
Fixed cost per unit foe 2000 cookie =
= $0.2485
= $0.249
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