Cup continue The combination of advertising, a price cut, and change in compensation increases income. 9 OwlCo recorded the following production activity and maintenance costs for two months: units Cost 9700 High activity level Low activity level Change 9000 5000 6100 4000 3600 Unit variable cost = in cost / in units = $3,600 / 4,000 = $0.90 per unit Fixed cost = Total cost - Total variable cost Fixed cost = $9,700 -($0.90 per unit x 9,000 units) Fixed cost = $9,700 - $8,100 = $1,600 Total cost = $1,600 + $0.90 per unit 10 If sales commissions are $10,000 when 80,000 units are sold and $14,000 when 120,000 units are sold, what is the variable portion of sales commission per unit sold? units Cost 120000 High activity level 14000 Low activity level 10000 Change 80000 40000 4000 Unit variable cost = in cost / in units = $4000 / 4,0000 = $0.10 per unit 11 If sales commissions are $10,000 when 80,000 units are sold and $14,000 when 120,000 units are sold, what is the fixed portion of the sales commission? Fixed cost = Total cost - Total variable cost Fixed cost = $14,000 -($0.10 per unit x 120,000 units) Fixed cost = $14,000 - $12,000 = $2,000 Total cost = $2,000+ $0.10 per unit Cup continue The combination of advertising, a price cut, and change in compensation increases income. 9 OwlCo recorded the following production activity and maintenance costs for two months: units Cost 9700 High activity level Low activity level Change 9000 5000 6100 4000 3600 Unit variable cost = in cost / in units = $3,600 / 4,000 = $0.90 per unit Fixed cost = Total cost - Total variable cost Fixed cost = $9,700 -($0.90 per unit x 9,000 units) Fixed cost = $9,700 - $8,100 = $1,600 Total cost = $1,600 + $0.90 per unit 10 If sales commissions are $10,000 when 80,000 units are sold and $14,000 when 120,000 units are sold, what is the variable portion of sales commission per unit sold? units Cost 120000 High activity level 14000 Low activity level 10000 Change 80000 40000 4000 Unit variable cost = in cost / in units = $4000 / 4,0000 = $0.10 per unit 11 If sales commissions are $10,000 when 80,000 units are sold and $14,000 when 120,000 units are sold, what is the fixed portion of the sales commission? Fixed cost = Total cost - Total variable cost Fixed cost = $14,000 -($0.10 per unit x 120,000 units) Fixed cost = $14,000 - $12,000 = $2,000 Total cost = $2,000+ $0.10 per unit