You will be doing tasks related to a retail store selling movie DVDs. Assume the store sells only movie DVDs. You have been assigned this business because it is relatively simple with approximately the same contribution margin percentage for all products. Create unit costs for the variable costs:

My response: Fixed costs as we know differ from variable costs in the sense that they do not change relative to the amount of units that are produced (level of activity) within a relevant range. One thing that is important to note about fixed costs, though, is that unlike variable cost, fixed cost per unit decreases the more you produce.

Examples of fixed costs for a DVD retailer could be Property taxes for where the store is located, insurance on the building, supervisor salary, and depreciation on the building.

As for an estimation, these are by no means approximate. (Monthly)

Supervisor Salary: 5,000

Insurance: 3,500

Depreciation: 600

Property taxes: 2,000

Total fixed costs: 11,100

Based on the information above please create unit costs for the variable cost?