Fixed and Variable Cost Behavior

Killy's Baskets has the following current-year costs:

VC $6 per unit

FC $7,000

Killy and a key supplier have entered into an arrangement that will result in a per-unit decrease in Killy's variable cost of $0.50 next year. Rental space will also be reduced, thereby decreasing fixed costs by 10 percent.

Required Given the new cost equation, determine estimated total costs if production remains at 12,000 units.