Alisha Incorporated manufactures medical stents for use in heart bypass surgery.

Question

Alisha Incorporated manufactures medical stents for use in heart bypass surgery. Based on past experience, Alisha has found that its total maintenance costs can be represented by the following formula: Maintenance Cost = $2,100,000 + $125X, where X = Number of Heart Stents. Last year, Alisha produced 44,000 stents. Actual maintenance costs for the year were as expected.

if required, round your answers to the nearest cent.

1. What is the total maintenance cost incurred by Alisha last year?

$

2. What is the total fixed maintenance cost incurred by Alisha last year?

$

3. What is the total variable maintenance cost incurred by Alisha last year?

$

4. What is the maintenance cost per unit produced?

$per unit

5. What is the fixed maintenance cost per unit?

$per unit

6. What is the variable maintenance cost per unit?

$per unit

7. Alisha management could improve its cost function to better understand past maintenance costs and predict future maintenance costs by.

Explanation / Answer

Particulars

Amount ($)

Maintenance cost {2100000 + (44000 x 125)}

Particulars

Amount ($)

Fixed maintenance costs

Particulars

Amount ($)

Total variable maintenance cost incurred by Alisha last year (44000 x 125)

Particulars

Amount ($)

Total maintenance costs

Maintenance cost {2100000 + (44000 x 125)}

Number of stents produced

Maintenance cost per unit (7600000/44000)

Particulars

Amount ($)

Fixed maintenance costs

Number of stents

Fixed maintenance cost per unit (2100000/44000)

Particulars

Amount ($)

Variable maintenance cost per unit

Q7:

Alisha along with cost information should also assess the expected inflation and adjust the variable and fixed cost by inflation factor to assess the expected future costs correctly.

Particulars

Amount ($)

Maintenance cost {2100000 + (44000 x 125)}

Particulars

Amount ($)

Fixed maintenance costs

Particulars

Amount ($)

Total variable maintenance cost incurred by Alisha last year (44000 x 125)

Particulars

Amount ($)

Total maintenance costs

Maintenance cost {2100000 + (44000 x 125)}

Number of stents produced

Maintenance cost per unit (7600000/44000)

Particulars

Amount ($)

Fixed maintenance costs

Number of stents

Fixed maintenance cost per unit (2100000/44000)

Particulars

Amount ($)

Variable maintenance cost per unit

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.