1. Company: Pi Foods

Scenario: Cost Control in Food Production

Data:

• Monthly Fixed Costs: $250,000
• Variable Costs per Unit: $5
• Units Produced: 50,000

Requirements:

1. Calculate the total monthly costs.
2. Determine the cost per unit.
3. Analyze the effect of increasing production by 10,000 units on total and per-unit costs.
4. Discuss the importance of understanding fixed and variable costs in food production.
5. Recommend strategies to manage production costs effectively.