ACCT $254$

Fixed Costs and Quantity Relationship Assignment

Make It Company manufactures one product. Its variable manufacturing cost is $$25$ per unit; total fixed manufacturing cost is $$1,500,000.$

Required:

$1.)$ Calculate Make It's total manufacturing costs if it produces $20,000$ units.

$2.)$ What would be the total cost per unit $($including both fixed and variable costs$)$ assuming that Make It produces $20,000$ units?

$3.)$ Calculate Make It's total manufacturing costs if it produces $40,000$ units.

$4.)$ What would be the total cost per unit assuming that Make It produces $40,000$ units?

$5.)$ Compare your answers from parts $2$ and $4.$ If the cost per unit is different at $20,000$ units than at $40,000$ units, explain why.