A) Sales at past trade shows have ranged between 400 and 600 software packages p
ID: 2392761 • Letter: A
Question
A) Sales at past trade shows have ranged between 400 and 600 software packages per show. Determine the average cost of sales per unit if Ms. Jekyll sells 400, 450, 500, 550, or 600 units of Abacus at a trade show. Use the following chart to organize your answer. Is the cost of booth space fixed or variable?
B) If Ms. Jekyll wants to earn a $56 profit on each package of software she sells at a trade show, what price must she charge at sales volumes of 400, 450, 500, 550, or 600 units?
C) Record the total cost of booth space if Ms. Jekyll attends four, five, six, seven, or eight trade shows. Is the cost of booth space fixed or variable relative to the number of shows attended?
Required A Required B Required C Required D Sales at past trade shows have ranged between 400 and 600 software packages per show. Determine the average cost of sales per unit if Ms. Jekyll sells 400, 450, 500, 550, or 600 units of Abacus at a trade show. Use the following chart to organize your answer. Is the cost of booth space fixed or variable? (Round "Average cost per unit" answers to 2 decimal places.) Show less Sales Volume in Units 400 450 500 550 600 $ 80,000 Total cost of software Total cost of booth rental Total cost of sales Average cost per unit The cost of booth space is a 10,000 $ 90,000 $ 225.00Explanation / Answer
The cost of booth space is a fixed cost because it will not change with level of sale.
Variable Cost per Unit $ 200
Total cost of booth rental
The cost of booth space relative to the number of shows attended is a Fixed Cost
Additional cost per unit =30/54 = $ 0.56
A Sales Volume in units 400 450 500 550 600 Total cost of software $80,000 $90,000 $100,000 $110,000 $120,000 Total cost of booth rental 10000 10000 10000 10000 10000 Total cost of sales $90,000 $100,000 $110,000 $120,000 $130,000 Average cost per unit 225.00 222.22 220.00 218.18 216.67The cost of booth space is a fixed cost because it will not change with level of sale.
Variable Cost per Unit $ 200
B Calculation of Sales price per unit 400 450 500 550 600 Average Cost per unit 225.00 222.22 220.00 218.18 216.67 Add Required Profit $56 $56 $56 $56 $56 Sales Price per unit 281.00 278.22 276.00 274.18 272.67 Number of Trade Shows attended No of booth 4 5 6 7 8
Total cost of booth rental
40000 50000 60000 70000 80000The cost of booth space relative to the number of shows attended is a Fixed Cost
D Additional cost P u 0.56 The cost is a variable costAdditional cost per unit =30/54 = $ 0.56
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