Question

1. Jim manufactures sunglasses and reported sales revenues of $210,000 and total costs of $56,000 this year. Jim incurs variable cost that is 10% of sales. What would the total costs be if sales were $168,000?
   1. $16,800
   2. $32,000
   3. $41,400
   4. $51,800
   5. Some other amount
2. Emma Corp. has only variable costs and fixed costs. A review of the company’s records disclosed that when 200,000 units were produced, fixed manufacturing costs amounted to $800,000 and the cost per unit manufactured totaled $11. On the basis of this information, how much cost would the firm anticipate at an activity level of 205,000 units?
   1. $2,235,000
   2. $2,222,000
   3. $2,214,000
   4. $2,200,000
   5. Some other amount

Answer 1

ㅗ d.) $51.800 variable Cost = 10% of Sales Total Cost : Variabee cost (t) fixed Cost • when Revenue Z $ 210,oo $ 56ooo Total lost z 210,000 (X) 10% (+ fixed lost $21000 (+ fixed cost fixed Cost = $35,000 when Revenue = $1680po Total lost & (+) $3.000 $168000 (x) 10.A $51,800 2 A) $2,235,000 Total lost = variabe lost (+ fixed lost. $11 valuable cost (t) $4 [800,000 veliable Cost = $7 Per unt. 200 000 205ooo units Total Costa $ 800,000 7 x 205ooo (+) $2,235,000