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  • Abc 1

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    John Bernard Alce
    8 views2 pages
    The document provides information on the variable costs, fixed costs, unit sales, and calculations of unit cost for a company. It calculates the variable cost per unit as $10.64 and the total unit cost as $13.19 by adding the fixed cost per unit of $2.55. A graph shows how the unit cost decreases as quantity produced per month increases from 2,700 to 7,700 units. It also calculates the price sensitivity as -0.75, indicating demand is inelastic when price changes 36.67% and quantity changes -27.66%.

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    abc-1

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    The document provides information on the variable costs, fixed costs, unit sales, and calculations of unit cost for a company. It calculates the variable cost per unit as $10.64 and the total unit cost as $13.19 by adding the fixed cost per unit of $2.55. A graph shows how the unit cost decreases as quantity produced per month increases from 2,700 to 7,700 units. It also calculates the price sensitivity as -0.75, indicating demand is inelastic when price changes 36.67% and quantity changes -27.66%.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    8 views2 pages

    Abc 1

    Uploaded by

    John Bernard Alce
    The document provides information on the variable costs, fixed costs, unit sales, and calculations of unit cost for a company. It calculates the variable cost per unit as $10.64 and the total unit cost as $13.19 by adding the fixed cost per unit of $2.55. A graph shows how the unit cost decreases as quantity produced per month increases from 2,700 to 7,700 units. It also calculates the price sensitivity as -0.75, indicating demand is inelastic when price changes 36.67% and quantity changes -27.66%.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Current price 30

    Variable cost 50 000

    fixed cost 12 000

     rent 1 500
     labor 7 500
     utilities 3 000

    unit sales 4 700

    variable cost per unit = 50 000 / 4 700 = 10.64

    unit cost = variable cost per unit + (fixed cost / unit sales) MUP = 13.19 / (1-0.3) = 18.84

    unit cost = 10.64 + (12 000 / 4 700) TRP = 13.19 + (0.65 X 40 000)/4 700

    unit cost = 13.19 = 18.72

    unit cost = 10.64 + (12 000 / 3 700) BEV = 12 000 / (18.72 – 10.64)

    unit cost = = 1 486

    unit cost = 10.64 + (12 000 / 2 700)

    unit cost =

    Cost per unit

    15.08

    13.88

    13.19

    2 700 3 700 4 700 5 700 6 700 7 700

    Quantity produced per month


    % CHANGE IN PRICE % CHANGE IN QUANTITY

    30 – 19 / 30 * 100 = 36.67% (4 700 – 6 000) / 4 700 * 100 = -27.66%

    PRICE SENSITIVITY

    -27.66 / 36.67 = -0.75

    INELASTIC

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