Homework Answers
| Small Truck | Large Truck | ||
| Selling price | 62 | 62 | |
| Variable cost | 44 | 22 | |
| Contribution margin | 18 | 40 | |
| Fixed cost | 12000 | X | |
| 550 yards | = | (F.C of Large - F.C of Small) / (C.M of Large - C.M of Small) | |
| 500 | = | (X - $12000) / ($40 - $18) | |
| 11000 | = | (X - $12000) | |
| X | = | 23000 | |
| Therefore, Fixed cost of Large truck is $23,000 | |||
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