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Exercise 2-6B Fixed versus variable cost behavior Wray Chairs Corporation produces ergonomically designed chairs favored by architects. The company normally produces and sells from 4,000
Exercise 2-6B Fixed versus variable cost behavior Wray Chairs Corporation produces ergonomically designed chairs favored by architects. The company normally produces and sells from 4,000 to 10,000 chairs per year. The following cost data apply to various production activity levels: Cost Behavior, Operating Leverage, and Profitability 2,000 Number of Chairs Total costs incurred 3,000 4,000 5,000 Fixed Variable $ 60,000 20,000 $80,000 Total costs Per-unit chair cost Fixed Variable Total cost per chair $ 30.00 10.00 $ 40.00 Roczired 1. Complete the preceding table by filling in the missing amounts for the levels of activity shown in the first row of the table. b. Explain why the total cost per chair decreases as the number of chairs increases. L.L.siau
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