Question 1

The BAA Company has established a budget of $50,000.00 for the production of 1000 units. Half of this amount is fixed.

At an actual production level of 500 units

(a)Determine the variable cost per unit

(b)Determine the fixed cost per unit

(c)Determine total fixed cost

(d)Determine total variable cost

(e)Determine total costs

Question 2

Some selected cost data for a batch of 2000 units of product C are given below

Direct materials + Direct labour$125,000.00

Factory Overheads

(All indirect, 40% variable)$37,500.00

Administration Expenses

(20% variable)$60,000.00

Selling & Distribution$60,000.00

($20,000 variable)

Compute the following

(a)prime Cost per unit

(b)total fixed Cost

(c)variable cost per unit

Question 3.

Consumer Centered Manufacturers Ltd produces a finished product that is measured in metres. The following table gives information that relates metres of production to total costs:

Output/metres

Total Costs $

290

10,600

440

15,100

390

13,600

570

19,000

330

11,800

270

10,000

510

17,200

Required:

Use the High/low method of cost separation to do the following:

(a)Determine the variable cost per metre of production.

(b)Determine the amount of fixed costs involved in production.

(c)Develop an equation that relates output to total costs.