4 Advantage, Inc., a tennis equipment manufacturer, has variable costs of $0.60 per unit of product. In August, the volume of production was

Question

4 Advantage, Inc., a tennis equipment manufacturer, has variable costs of $0.60 per unit of product. In August, the volume of production was 27,000 units, and units sold were 21,800. The total production costs incurred were $30,600. What are the fixed costs per month?

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Quinn 2 weeks 2021-09-28T15:08:08+00:00 2 Answers 0

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    0
    2021-09-28T15:09:29+00:00

    Answer:

    $14,400

    Step-by-step explanation:

    Total number of units produced in August = 27000

    Variable costs per unit of the product = $0.60

    Let the fixed cost be represented by F.

    Then Total production cost for August = F + 0.6 * 27000

    But the total production cost is given as $30600

        \[F+0.6*27000=30600\]

        \[=> F+16200=30600\]

        \[=> F=30600-16200\]

        \[=> F=14400\]

    Hence, total fixed costs per month is $14400

    0
    2021-09-28T15:09:56+00:00

    Answer: the fixed costs per month is $14400

    Step-by-step explanation:

    Total cost = fixed cost + variable cost.

    The tennis equipment manufacturer, has variable costs of $0.60 per unit of product. In August, the volume of production was 27,000 units. This means that the total variable cost from producing 27000 units is

    27000 × 0.6 = 16200

    If the total production costs incurred were $30,600, then the fixed costs per month would be

    30600 = fixed cost + 16200

    Fixed cost = 30600 – 16200

    Fixed cost = $14400

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