# The total cost (TC) of an item is calculated as TC = F + VX, where X is the…… 1 answer below »

Multiple Choice Questions

1. The total cost (TC) of an item is calculated as TC = F + VX, where X is the…

A. estimated volume of production.

B. total variable cost.

C. variable cost per unit of activity.

D. actual volume of production.

2. The cost structure of an organization refers to which of the following?

A. proportion of fixed and variable costs to total costs.

B. proportion of total revenue to total costs.

C. proportion of profits to total costs.

D. None of the answers is correct.

Calculation Questions

1. Catfish Company produces two products, C and F, with the following characteristics: Product C Product F Selling price per unit $10 $15 Variable cost per unit $7 $10 Expected sales (units) 10,000 5,000

Total fixed costs for the company are $21,000.

REQUIRED (show your work):

A. What is the anticipated profit given the expected sales volume?

B. Assuming the product mix would be the same at the break-even point, compute the break-even point (be sure to indicate the number of units of each product).

C. If only product C were sold, how many units would be needed to break even?

D. If only product F were sold, how many units would be needed to break even?

E. If the product mix changed so that equal units of C and F were sold, what would be the new break-even point in total units?

2. Potomac Corporation wishes to earn a 25% return on its $100,000 investment in equipment used to produce product M. Based on estimated sales of 10,000 units of product M, the cost per unit would be as follows: Variable manufacturing costs $5 Fixed selling and administrative costs $2 Fixed manufacturing costs $1

At how much per unit should Pro

## Leave a Reply

Want to join the discussion?Feel free to contribute!