MATH SOLVE

1 month ago

Q:
# need help filling in the blanks.. (comparing depreciation methods.)

Accepted Solution

A:

Answer:Refer to step-by-step.Step-by-step explanation:Fixed Cost Per Deck = Total Fixed Cost/Estimated Deck SalesFixed Cost Per Deck = 85000/13000Fixed Cost Per Deck = $7.08Break Even Point in Units = Fixed Costs/ Sales Price per Unit - Variable CostBreak Even Point in Units = 85000/11.95 - 3Break Even Point in Units = 9497Fixed Cost Per Deck = Total Fixed Cost/Estimated Deck SalesFixed Cost Per Deck = 85000/10000Fixed Cost Per Deck = $8.50Break Even Point in Units = Fixed Costs/ Sales Price per Unit - Variable CostBreak Even Point in Units = 85000/12.95 - 3Break Even Point in Units = 8543Break Even Point in Units = Fixed Costs/ Sales Price per Unit - Variable CostBreak Even Point in Units = 85000/13.45 - 3Break Even Point in Units = 81341.Total Cost = Variable Cost/unit x Units Produced + Fixed costTotal Cost = (3 x 13000) + 85000Total Cost = 39000 + 85000Total Cost = $1240002.Total Cost = Variable Cost/unit x Units Produced + Fixed costTotal Cost = (3 x 10000) + 85000Total Cost = 30000 + 85000Total Cost = $1150003. $12.95 and $13.45.Because the total cost is greater than the revenue.Let's try at $12.95:Revenue = 12.95 x 8000Revenue = $103600Total Cost = (3 x 8000) + 85000Total Cost = 24000 + 85000Total Cost = $109000Profit = Revenue - Total CostProfit = 103600 - 109000Profit = $-5400Now at $13.45:Revenue = 13.45 x 7000 Revenue = $94150Total Cost = (3 x 7000) + 85000Total Cost = 21000 + 85000Total Cost = $106000Profit = Revenue - Total CostProfit = 94150 - 106000Profit = $-118504. The fixed costs to produce $13.45 decks is so much greater than the fixed costs to produce 10.95 due to the estimated deck sales.