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Sandhill Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as shown below.
Sandhill Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as shown below. Output in Units Rent Expense Direct Materials 1,000 $5,730 $4,584 2,000 5.730 7,800 3,000 -9.168 7,800 4,000 9.168 10.400 5,000 9.168 13,000 6.000 9.168 15.600 7,000 9.168 18,200 8,000 9.168 20,800 9,000 11.460 33.578 10,000 11.460 40.110 11,000 11,460 50.424 2. Determine the relevant range of activity for this product. 3. Calculate the variable cost per unit within the relevant range. 4. Indicate the fixed cost within the relevant range
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