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

\$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    Hence, total fixed costs per month is \$14400

2. 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