1. Company: Procter & Gamble

Scenario: Household Products Cost Control

Data:

• Monthly Fixed Costs: $1,200,000
• Variable Costs per Unit: $0.50
• Units Produced: 4,000,000

Requirements:

1. Calculate the total monthly costs.
2. Determine the cost per unit.
3. Analyze the effect of increasing production by 500,000 units on total and per-unit costs.
4. Discuss the importance of understanding fixed and variable costs in production planning.
5. Recommend strategies to manage production costs effectively.
6. Evaluate the potential cost savings from reducing packaging costs.