Question
In a slow year, Deutsche Burgers will produce 2.000 million hamburgers at a total cost of $4.100 million. In a good year, it can produce
In a slow year, Deutsche Burgers will produce 2.000 million hamburgers at a total cost of $4.100 million. In a good year, it can produce 5.000 million hamburgers at a total cost of $5.600 million.
a.What are the fixed costs of hamburger production?(Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.)
b.What is the variable cost per hamburger?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
c.What is the average cost per burger when the firm produces 1 million hamburgers?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
d.What is the average cost per burger when the firm produces 2 million hamburgers?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
A project currently generates sales of $17 million, variable costs equal 40% of sales, and fixed costs are $3.4 million. The firm's tax rate is 30%. Assume all sales and expenses are cash items.
a.What are the effects on cash flow, ifsales increase from $17 million to $18.7 million?(Input the amount as positive value. Enter your answer in dollars not in millions.)
b.What are the effects on cash flow, if variable costs increase to 45% of sales?(Input the amount as positive value. Enter your answer in dollars not in millions.)
The following estimates have been prepared for a project:
Fixed costs: $10,800
Depreciation: $7,200
Sales price per unit: $4
Accounting break-even: 40,000 units
What must be the variable cost per unit?(Round your answer to 2 decimal places.)
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