The total cost incurred by Winton company can be classified into two costs: Cost

Question

The total cost incurred by Winton company can be classified into two costs: Cost # 1 and Cost # 2.

In the next month, Winton is planning to sell 300 units.

1) The fixed cost for Winton Company equals $

2) The unit variable cost for Winton Compnay equals $

3) The expected total cost for Winton Company for next month equals $

4) If Winton can reduce the fixed cost by 2% by increasing the variable cost by 10%, the expected cost next month equals $

Units sold 50 100 150 200 Cost #1 $300 per unit $150 per unit $100 per unit $75 per unit Cost #2 $2 per unit $2 per unit $2 per unit $ 2 per unit

Explanation / Answer

From data, it is clear that: Cost 1: Fixed cost i.e. $15000 Cost 2: Variable cost i.e. $ 2 per unit Req 1: Total fixed cost = $ 15,000 (50 units @300) Req 2: The Unit Variable cost: $ 2 per unit Req 3: Expected cost of 300 units: Variable (300 units @2) 600 Fixed 15000 Total cost 15600 Req 4: The expected Cost of 300 Units: Variable (300 units @ 2+ 10%) 660 Fixed ($ 15000-2%) 14700 Total expected cost 15360

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