Question
i) Production in 2012 for California Manufacturing, a producer of high security bank vaults, was at its highest point in the month of June when
i) Production in 2012 for California Manufacturing, a producer of high security bank vaults, was at its highest point in the month of June when 42 units were produced at a total cost of $620,000. The lowest point in production was in January when only 17 units were produced at a cost of $342,000. The company is preparing a budget for 2012 and needs to project expected fixed cost for the budget year. Using the high/low method, the projected amount of fixed cost per month is
a) $258,000
b) $278,000
c) $142,960
d) $152,960
ii) Yankee Tours provide seven-day guided tours along the New England coast. The company pays its guides a total of $338,400 per year. The average cost of supplies, lodging and food per customer is $470. The company expects a total of 1,800 customers during the period January - June, and a total of 5,400 customers from July through December. Yankee wants to earn $170 income per customer. For promotional reasons the company desires to charge the same price throughout the year. Based on this information, what is the correct price per customer? (round to nearest dollar)
a) $734
b) $517
c) $687
d) $570
iii) What are the expected average quarterly costs of running a consulting practice if fixed costs are expected to be $5,100 a month and variable costs are expected to be $110 per client for each quarter? Expected number of clients for the year are (do not round intermediate calculations):
Jan-March | April-June | July-Sep | Oct-Dec |
115 | 145 | 155 | 105 |
a) $25,850
b) $14,300
c) $31,350
d) $29,600
iv) Wu Company incurred $68,200 of fixed cost and $80,600 of variable cost when 2,600 units of product were made and sold. If the company's volume increases to 3,100 units, the total cost per unit will be:
a) $26.
b) $22.
c) $48.
d) $53.
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