1. Company: Omicron Energy

Scenario: Cost Control in Energy Production

Data:

• Monthly Production Costs: $600,000
• Monthly Production Volume: 1,500,000 kWh
• Fixed Costs: $200,000
• Variable Costs: $400,000

Requirements:

1. Calculate the cost per kWh.
2. Determine the proportion of fixed and variable costs.
3. Analyze the impact of a 5% increase in production volume on total costs.
4. Discuss strategies for managing production costs.
5. Recommend ways to improve cost efficiency in energy production.