If i could just have help figuring out the last couple blanks on this chart. Tha

Question

If i could just have help figuring out the last couple blanks on this chart. Thank you.

Per Unit Cost (Variable) Variable or Fixed Cost Annual Cost (Fixed) Fixed Cost Fixed Cost Variable Costs Fixed Cost Fixed Cost Fixed Cost Fixed Cost Variable Costs Fixed Cost Fixed Cost Fixed Cost Fixed Cost Fixed Cost Fixed Cost Variable Costs Variable Costs Variable Costs Variable Costs Variable Costs Variable Costs Product or Period Cost Product Cost Product Cost Business Costs Artist- Contract Artist- design fee Computer/Printer 90% Facatory Operations Product Cost Computer/Printer 10% Selling/Administrative Period Cost Depreciation- Computer/Printer Depreciation- Computer/Printer Depreciation- Heating Press Machine Period Cost Period Cost Period Cost Product Cost Period Cost Product Cost Period Cost Product Cost Period Cost Period Cost Product Cost Product Cost Product Cost Product Cost Product Cost Product Cost $10,000 $3,600 $5,400 $600 $1,800 $200 $1,500 $4,500 $3,600 $27,000 $3,000 $12,000 $4,000 $1,500 1 Heat Press Machine Liability Insurance Mall Rent 90% Factory Operations Mall Rent 10% Selling/Administrative Owners Quarterly Parties 7 Storage Unit Inkjet Cartridges Inkjet Cartridges Laser Paper 1 Student workers (3) Student workers (3) T-shirts 29,250

Explanation / Answer

Inkjet Cartridges:

It should be understood that Ink-Jet Cartridges will be used in printing T-shirt as well as to print flyers.

One Ink-jet Cartridges costs $50 and prints 500 prints. It means $0.1 per unit (50 / 500).

$0.1 is variable cost for every printed- t shirt and hence will become part of product cost.

For the Flyers, 1 page will be required to print for every 5 t-short sold. One single Print costs $0.1, for every t-shirt sold out of 5 t-shirt, selling expenses on account of flyers will be $0.02 ($0.1 / 5).

Hence for a T-shirt we can state $0.1 is variable cost for printing and $0.02 is variable selling overheads.

Laser Paper:

1 page will be required to print for every 5 t-short sold. A ream of 200 sheets will cost $20, which is $0.1 per sheet.

1 sheet will be required for every 5 T-Shirt for the purpose of promotion flyers. Since 1 sheet will be used for 5 t-shirts, it will costs $0.1 / 5= $0.02 for every t-shirt.

Hence $0.02 is variable selling cost on account of paper used for promotion flyers.

Students:

It should be noted that Students role would be to operate the machine, helping in folding, wrap and box T-shirts.

For 10 T-Shirts, machine needs to be operated for 1 labor hour. 1 labor hour costs company $8. For a t-shirt, variable direct labor cost would be $0.8 ($8 / 10).

Hence $0.8 is variable labor cost on account of labor paid to operate the machine.

For Folding and Packaging 20 t-shirts, 1 labor hour will be spent. 1 labor hour costs company $8. For a t-shirt, variable direct labor cost would be $0.4 ($8 / 20).

Variable cost on account of folding and wrapping would be $0.4 per unit.

Hope the above explanation helps.

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