1.

A) If a company makes 100 units of product, the allocated fixed cost per unit is $5

and the variable cost per unit is $6. What will be the per-unit total cost (fixed plus

variable cost) if the company makes 200 units?

B) At a production and sales level of 1,000 units, the companys costs are as follows:

Variable manufacturing costs per unit $20

Allocated fixed manufacturing cost per unit $10

Variable selling costs per unit $ 5

Allocated fixed selling costs per unit $ 3

How much would the company have to spend in total (total cash outlay for both

fixed and variable costs), if it makes 1,200 units and sells 200 units (so that 1,000

units are in ending inventory at the end of the period)?

2.: Describe each of the following costs as either fixed, variable, or semi-variable (i.e.,

mixed)

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A) The cost is $500 per unit at a production level of 50 units, and $500 per unit at a

production level of 100 units.

B) The cost is $500 in total at a production level of 50 units, and $1,000 in total at a

production level of 100 units.

C) The cost is $500 in total at a production level of 5 units, and $100 per unit at a

production level of 10 units.

3.: In general, and within the relevant range, as production increases:

(A) Per unit fixed costs and per unit variable costs both stay the same.

(B) Per unit variable costs go down, and per unit fixed costs stay the same.

(C) Per unit fixed costs go down, and per unit variable costs stay the same.

(D) Per unit fixed costs and total variable costs both stay the same.