PQR Electronics Inc.

Scenario: Analyze Cost Behavior

Data:

• Fixed Costs: $50,000
• Variable Costs per Unit: $8
• Production Volume: 10,000 units

Requirements:

1. Calculate the total fixed costs incurred by PQR Electronics.
2. Determine the total variable costs based on the production volume.
3. Analyze the cost behavior pattern (fixed vs. variable) at different production levels.
4. Discuss strategies to manage fixed and variable costs effectively.