Respuesta :
Answer:
                  70,000         90,000             100,000
Total variable costs   $350,000     $450,000           $500,000
Total fixed costs      $630,000       $630,000           $630,000
Total Costs           $980,000      $1,080,000          $1,130,000
variable costs per unit   $5            $5                 $5
fixed cost costs per unit  $9            $7                 $6.30
total cost per unit       $14           $12                 $11.30
Explanation:
Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments
If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output. Â
Hourly wage costs and payments for production inputs are variable costs
Variable costs are costs that vary with production
If a producer decides not to produce any output, there would be no need to hire labour and thus no need to pay hourly wages. Â
fixed cost would remain the same regardless of the number of output. Fixed cost would be $630,000 for 90,000 and 10,000 unit of output
fixed cost per unit = total fixed cost / output
$630,000 / 70,000 = $9
$630,000 / 90,000 = $7
$630,000 / 100,000 = $6.30
to determine the total variable cost for quantities, 90,000 and 10,000, the average variable cost has to be determined
Average variable cost = total variable cost / output
$350,000 / 70,000 = $5
Average total cost = average fixed cost + average variable cost
total variable cost for output 90,000 = $5 x 90,000 = $450,000
total variable cost for output 100,000 = $5 x 100,000 = $500,000
total cost = total fixed cost + total variable cost
total cost for output 90,000 = $450,000 + $630,000 = $1,080,000
total cost for output 100,000 = $500,000 + $630,000 = $1,130,000
