Question 1

Feathered Nests produces decorative birdhouses. The company's average cost per unit is $20.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-If $4,800 of the total costs are fixed, what is the variable cost of producing each birdhouse?

Accepted Answer

The answer of Feathered Nests produces decorative birdhouses. The company's...

Question 2

Feathered Nests produces decorative birdhouses. The company's average cost per unit is $20.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-If $4,800 of the costs are fixed, and the plant manager uses the average cost per unit to predict total costs, his forecast for 2,200 birdhouses will be

Accepted Answer

The total cost of producing 2,000 birdhouses can be found by multiplying the average cost per unit by the number of units produced: $20.00 x 2,000 = $40,000.
If $4,800 of the costs are fixed, then the variable cost per unit is $20.00 - ($4,800 / 2,000) = $17.60. Using this variable cost per unit, the forecast for 2,200 birdhouses would be: ($17.60 x 2,200) + $4,800 = $43,520. Therefore, the best choice is B.

Question 3

BestCalls has a special plan offer this month. There is a $4.00 per month charge each month and calls anywhere in the United States are $0.03 per minute. What would the monthly cost be if you typically talk for 500 minutes per month?

Accepted Answer

To calculate the monthly cost, we need to add the monthly charge of $4.00 to the cost of the 500 minutes of talk time.

The cost of 500 minutes at $0.03 per minute is:

500 x $0.03 = $15.00

Adding the monthly charge of $4.00, the total monthly cost would be:

$15.00 + $4.00 = $19.00

Therefore, the best choice is C, with a monthly cost of $19.00.

Question 4

Plymouth Manufacturing produces cup holders. Total manufacturing costs are $400,000 when 40,000 holders are produced. Of this amount, total variable costs are $120,000. What are the total production costs when 60,000 holders are produced? (Assume the same relevant range for both production levels.)

Accepted Answer

The variable cost per unit is $120,000 / 40,000 = $3. Fixed costs are $400,000 - $120,000 = $280,000. For 60,000 units, total variable costs are 60,000 * $3 = $180,000. Total costs = $280,000 (fixed) + $180,000 (variable) = $460,000.

Question 5

Feathered Nests produces decorative birdhouses. The company's average cost per unit is $20.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-If $4,800 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, his forecast for 2,200 birdhouses will be

Accepted Answer

Total cost of producing 2,000 birdhouses = 2,000 x $20.00 = $40,000
Using the cost equation: Total cost = Fixed cost + (Variable cost per unit x Quantity produced)
Fixed cost = $4,800
Variable cost per unit = Total cost / Quantity produced = $40,000 / 2,000 = $20.00
Total cost for 2,200 birdhouses = $4,800 + ($20.00 x 2,200) = $43,520
Therefore, the answer is C ($43,520).

Question 6

Angry Bird produces decorative birdhouses. The company's average cost per unit is $40.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-If $10,000 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, his forecast for 2,200 birdhouses will be

Accepted Answer

The answer of Angry Bird produces decorative birdhouses. The company's...

Question 7

Harbour Manufacturing is trying to predict the cost associated with producing its anchors. At a production level of 4,000 anchors, Harbour Manufacturing's average cost per anchor is $50.00.
-At Harbour Manufacturing if $20,000 of the costs are fixed, and the plant manager uses the average cost per unit to predict total costs, her forecast for 5,000 anchors will be

Accepted Answer

At 4,000 anchors, the average cost is $50.00 per anchor, which includes both fixed and variable costs. The total cost for 4,000 anchors is 4,000 * $50 = $200,000. Given that $20,000 of this is fixed cost, the variable cost is $200,000 - $20,000 = $180,000. The variable cost per anchor is $180,000 / 4,000 = $45. For 5,000 anchors, the total variable cost is 5,000 * $45 = $225,000. Adding the fixed cost of $20,000, the total cost for 5,000 anchors is $225,000 + $20,000 = $245,000. However, if the plant manager uses the average cost per unit ($50) to predict total costs for 5,000 anchors, she would calculate 5,000 * $50 = $250,000.

Question 8

Angry Bird produces decorative birdhouses. The company's average cost per unit is $40.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-If $10,000 of the total costs are fixed, what is the variable cost of producing each birdhouse?

Accepted Answer

The answer of Angry Bird produces decorative birdhouses. The company's...

Question 9

Pedro Company has total fixed costs of $480,000. Total fixed and variable costs are $600,000 at a production level of 125,000 units.
-At Pedro Company the fixed cost per unit at a production level of 300,000 units is

Accepted Answer

Fixed costs remain constant regardless of the level of production. Therefore, the fixed cost per unit at a production level of 300,000 units is $480,000 / 300,000 units = $1.60.

Question 10

Harbour Manufacturing is trying to predict the cost associated with producing its anchors. At a production level of 4,000 anchors, Harbour Manufacturing's average cost per anchor is $50.00.
-At Harbour Manufacturing if $20,000 of the total costs are fixed, what is the variable cost of producing each anchor?

Accepted Answer

The total cost for producing 4,000 anchors is 4,000 anchors * $50/anchor = $200,000. Subtracting the fixed cost of $20,000 from the total cost gives $180,000 as the total variable cost. Dividing this by the number of anchors (4,000) gives a variable cost of $45 per anchor.

Question 11

Harbour Manufacturing is trying to predict the cost associated with producing its anchors. At a production level of 4,000 anchors, Harbour Manufacturing's average cost per anchor is $50.00.
-At Harbour Manufacturing if $20,000 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, her forecast for 5,000 anchors will be

Accepted Answer

The answer of Harbour Manufacturing is trying to predict the...

Question 12

Harbour Manufacturing is trying to predict the cost associated with producing its anchors. At a production level of 4,000 anchors, Harbour Manufacturing's average cost per anchor is $50.00.
-At Harbour Manufacturing what is the total cost of producing 4,000 anchors?

Accepted Answer

The total cost of producing 4,000 anchors at an average cost of $50.00 per anchor is calculated by multiplying the number of anchors (4,000) by the average cost per anchor ($50.00), which equals $200,000.

Question 13

Angry Bird produces decorative birdhouses. The company's average cost per unit is $40.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-If $10,000 of the costs are fixed, and the plant manager uses the average cost per unit to predict total costs, his forecast for 2,200 birdhouses will be

Accepted Answer

The average cost per unit is $40, so for 2,000 birdhouses, the total cost is 2,000 x $40 = $80,000. If the manager uses the average cost per unit to predict costs for 2,200 birdhouses, it would be 2,200 x $40 = $88,000.

Question 14

Pedro Company has total fixed costs of $480,000. Total fixed and variable costs are $600,000 at a production level of 125,000 units.
-At Pedro Company the variable cost per unit at 300,000 units is

Accepted Answer

First, we can use the information given to find the variable cost per unit at the production level of 125,000 units:

Total Variable Cost = Total Cost - Total Fixed Cost
Total Variable Cost = $600,000 - $480,000
Total Variable Cost = $120,000

Variable Cost per Unit = Total Variable Cost / Number of Units
Variable Cost per Unit = $120,000 / 125,000 units
Variable Cost per Unit = $0.96

Next, we can use the high production level of 300,000 units to find the variable cost per unit:

Total Variable Cost = Total Cost - Total Fixed Cost
Total Fixed Cost = $480,000
Total Cost = $600,000 (given)
Total Variable Cost = $600,000 - $480,000
Total Variable Cost = $120,000

Variable Cost per Unit = Total Variable Cost / Number of Units
Variable Cost per Unit = $120,000 / 300,000 units
Variable Cost per Unit = $0.40

Therefore, the variable cost per unit at a production level of 300,000 units is $0.40, and the best choice is B.

Question 15

Fresh Best Friends produces 80,000 dog collars each month that give off a fresh scent to keep your dog smelling clean between baths. Total manufacturing costs are $240,000. Of this amount, $180,000 are variable costs. What are the total production costs when 100,000 collars are produced? (Assume both production levels are in the same relevant range.)

Accepted Answer

The total production costs increase as production increases, primarily due to variable costs. Fixed costs remain the same ($240,000 - $180,000 = $60,000). The variable cost per unit is $180,000 / 80,000 = $2.25. For 100,000 units, variable costs are 100,000 * $2.25 = $225,000. Adding fixed costs, total costs are $225,000 + $60,000 = $285,000.

Question 16

Feathered Nests produces decorative birdhouses. The company's average cost per unit is $20.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-What is the total cost of producing 2,000 birdhouses?

Accepted Answer

The total cost of producing 2,000 birdhouses is found by multiplying the average cost per unit ($20.00) by the number of units (2,000), which equals $40,000.

Question 17

The Clauson Company has total fixed costs of $400,000. They also have $120,000 in total variable costs. These costs exist at a production level of 80,000 units.
-The Clauson Company variable cost per unit is

Accepted Answer

The variable cost per unit is calculated by dividing the total variable costs by the number of units produced: $120,000 / 80,000 units = $1.50 per unit.

Question 18

The Clauson Company has total fixed costs of $400,000. They also have $120,000 in total variable costs. These costs exist at a production level of 80,000 units.
-The Clauson Company fixed cost per unit is

Accepted Answer

To find the fixed cost per unit, we need to divide the total fixed costs by the number of units produced.

Fixed cost per unit = Total fixed costs / Number of units produced

Fixed cost per unit = $400,000 / 80,000 units

Fixed cost per unit = $5

Therefore, the fixed cost per unit for the Clauson Company is $5. Choice C is the correct answer.

Question 19

Angry Bird produces decorative birdhouses. The company's average cost per unit is $40.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-What is the total cost of producing 2,000 birdhouses?

Accepted Answer

The total cost of producing 2,000 birdhouses is calculated by multiplying the average cost per unit ($40.00) by the number of units (2,000), which equals $80,000.

Question 20

Pedro Company has total fixed costs of $480,000. Total fixed and variable costs are $600,000 at a production level of 125,000 units.
-At Pedro Company the variable cost per unit at 300,000 units is

Accepted Answer

Total fixed costs remain the same regardless of the production level. The variable cost per unit is calculated as follows:

Variable cost per unit = (Total fixed and variable costs - Total fixed costs) / Number of units produced

At a production level of 125,000 units, the variable cost per unit is:

Variable cost per unit = ($600,000 - $480,000) / 125,000 = $0.96

Since the fixed costs remain the same, the variable cost per unit at 300,000 units will be the same as at 150,000 units, which is $0.96. Therefore, the answer is A.

Quiz 3: Cost Behaviour

Feathered Nests produces decorative birdhouses. The company's average cost per unit is $20.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses? -If $4,800 of the total costs are fixed, what is the variable cost of producing each birdhouse?

BestCalls has a special plan offer this month. There is a $4.00 per month charge each month and calls anywhere in the United States are $0.03 per minute. What would the monthly cost be if you typically talk for 500 minutes per month?

Plymouth Manufacturing produces cup holders. Total manufacturing costs are $400,000 when 40,000 holders are produced. Of this amount, total variable costs are $120,000. What are the total production costs when 60,000 holders are produced? (Assume the same relevant range for both production levels.)

Angry Bird produces decorative birdhouses. The company's average cost per unit is $40.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses? -If $10,000 of the total costs are fixed, what is the variable cost of producing each birdhouse?

Pedro Company has total fixed costs of $480,000. Total fixed and variable costs are $600,000 at a production level of 125,000 units. -At Pedro Company the fixed cost per unit at a production level of 300,000 units is

Harbour Manufacturing is trying to predict the cost associated with producing its anchors. At a production level of 4,000 anchors, Harbour Manufacturing's average cost per anchor is $50.00. -At Harbour Manufacturing what is the total cost of producing 4,000 anchors?

Pedro Company has total fixed costs of $480,000. Total fixed and variable costs are $600,000 at a production level of 125,000 units. -At Pedro Company the variable cost per unit at 300,000 units is

Feathered Nests produces decorative birdhouses. The company's average cost per unit is $20.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses? -What is the total cost of producing 2,000 birdhouses?

The Clauson Company has total fixed costs of $400,000. They also have $120,000 in total variable costs. These costs exist at a production level of 80,000 units. -The Clauson Company variable cost per unit is

The Clauson Company has total fixed costs of $400,000. They also have $120,000 in total variable costs. These costs exist at a production level of 80,000 units. -The Clauson Company fixed cost per unit is

Angry Bird produces decorative birdhouses. The company's average cost per unit is $40.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses? -What is the total cost of producing 2,000 birdhouses?

Pedro Company has total fixed costs of $480,000. Total fixed and variable costs are $600,000 at a production level of 125,000 units. -At Pedro Company the variable cost per unit at 300,000 units is