Alisha Company manufactures medical stints for use in heart bypass surgery. Base

Question

Alisha Company manufactures medical stints 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 = $277,000 + $15.70X where X = Number of heart stints. Last year, Alisha produced 90,000 stints. Actual maintenance costs for the year were as expected. In your calculations, round all per unit costs to the nearest cent. What is the total maintenance cost incurred by Alisha last year? What is the total fixed maintenance cost incurred by Alisha last year? What is the total variable maintenance cost incurred by Alisha last year? What is the maintenance cost per unit produced? Round your answer to the nearest cent. What is the fixed maintenance cost per unit? Round your answer to the nearest cent. What is the variable maintenance cost per unit? Round your answer to the nearest cent.

Explanation / Answer

Maintenance cost = $277,000+$15.70*X Number of stints produced during the period (X) 90000 In the given formula, it was indicated that Total fixed cost $                  2,77,000.00 Variable cost per unit $                            15.70 1) Total maintenance cost incurred by Aisha in the last year Maintenance cost = $277,000+$15.70*X Maintenance cost = $277,000+$15.70*90000 Maintenance cost = $                16,90,000.00 Total maintenance cost incurred by Aisha in the last year $                16,90,000.00 2) Total fixed maintenance cost for the last year Total fixed cost = $                  2,77,000.00 3) Variable cost per unit = $                            15.70 Number of stints produced during the period (X) = 90000 Total variable cost for maintenance = $                14,13,000.00 4) Maintenance cost per unit produced Total maintenance cost incurred by Aisha in the last year = $                16,90,000.00 Number of stints produced during the period (X) = 90000 Maintenance cost per unit produced = 1690000/90000 Maintenance cost per unit produced = $                            18.78 5) Fixed maintenance cost per unit Total fixed cost = $                  2,77,000.00 Number of stints produced during the period (X) = 90000 Fixed maintenance cost per unit = 277000/90000 Fixed maintenance cost per unit = $                              3.08 6) Variable cost per unit = $                            15.70

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