Question

please show work/give explaination

21 180-120 26-11 * Estimate unit variable cost Month Total costs Activity volume in units September $120 October $90 11 0 November - $150 31 December $180 26 H A. not enough information need to know the contribution margin statement in the relevant range B. $3.00/unit C. $4.00/unit D. $4.50/unit E. $6.00/unit Z At current production volume of 1,000 units, variable costs are $6 per unit and fixed costs are $4 per unit, for a total unit cost of $10 per unit. Predict total costs at production volume of 900 units. A. $5,400 10x900 B. $9,000 C. $9,400 D. $9,600 E. not enough information need to know the total cost equation 1,000 / Total fixed costs are $1,000, the price is $30, unit variable cost is $20. Breakeven revenue in dollars is: FC/CMR A. $100 B. $1,000 C. $1.500 D. $3,000 E. not enough information need data on total revenue and total costs to determine CMR Estimate unit variable costs. Production volume was 10 units. fire insurance $100 $240 depreciation $200 660

Answer 1

Ans. 1	Option B   $3.00 / unit
	High low method : In this method, we assumed that the highest activity (miles driven) leads to
	highest cost and lowest activity leads to lowest cost.
	Variable cost per unit = (Highest cost - Lowest cost) / (Highest activity - Lowest activity)
	($150 - $90) / (31 - 11)
	$60 / 20
	$3.00 / unit
Ans. 2	Option C   $9,400
	Calculations:
	Fixed cost at current level   = Current production volume * Fixed cost per unit
	1,000 * $4    =     $4,000
	Total fixed cost and variable cost per unit always remain constant on each level
	of production activities. So the total cost on the level of 900 units will be calculated
	as follows:
	Fixed cost	$4,000
	Variable cost ($6 * 900)	$5,400
	Total cost	$9,400
Ans. 3	Option D $3,000
	Calculations:
	*Contribution margin per unit = Price - Unit variable cost
	$30 - $20   =   $10 per unit
	Break even revenue in dollars = Fixed cost / Contribution margin per unit * Price per unit
	$1,000 / $10 * $30
	$3,000