Question
Soft Serve Hut sells frozen yogurt to customers. The monthly fixed costs of operating the business include things like rent and depreciation of equipment. The
Soft Serve Hut sells frozen yogurt to customers. The monthly fixed costs of operating the business include things like rent and depreciation of equipment. The variable costs of the business include the cost of materials, supplies and labor. In a month when 10,000 frozen yogurts were sold, the fixed cost was $8,500 and the variable costs were $2,000. (Assume all costs are within the relevant range.) Show all work.
A) At the current level, what is the total cost per unit? $
If sales increase to 17,000 frozen yogurts:
B) What is the expected fixed cost? $
C) What is the expected variable cost? $
D) What is the total expected cost? $
E) What is the expected total cost per unit? $
If sales decreased to 4,250 frozen yogurts:
F) What is the expected fixed cost? $
G) What is the expected variable cost? $
H) What is the total expected cost? $
I) What is the expected total cost per unit? $
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