Scribd Logo
Upload

Welcome to Scribd!

  • Exercise 3

    Uploaded by

    sherryl cao
    27 views1 page
    The document shows calculations for changes in price, quantity, revenues, costs, and profits as production quantity is increased from 4,500 units to 13,000 units. Fixed costs are $1,000,000. Direct materials cost $200 per unit and direct labor costs $300 per unit. As quantity increases, total revenue, variable costs, and profits increase, while average costs and profits per unit decrease due to fixed costs being spread over more units of production.

    Original Description:

    Original Title

    Exercise 3.docx

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document shows calculations for changes in price, quantity, revenues, costs, and profits as production quantity is increased from 4,500 units to 13,000 units. Fixed costs are $1,000,000. Direct materials cost $200 per unit and direct labor costs $300 per unit. As quantity increases, total revenue, variable costs, and profits increase, while average costs and profits per unit decrease due to fixed costs being spread over more units of production.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    27 views1 page

    Exercise 3

    Uploaded by

    sherryl cao
    The document shows calculations for changes in price, quantity, revenues, costs, and profits as production quantity is increased from 4,500 units to 13,000 units. Fixed costs are $1,000,000. Direct materials cost $200 per unit and direct labor costs $300 per unit. As quantity increases, total revenue, variable costs, and profits increase, while average costs and profits per unit decrease due to fixed costs being spread over more units of production.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    Given:

    Fixed Cost 1,000,000.00


    Direct Materials per unit 200.00
    Direct Labor per unit 300.00

    Marginal Marginal
    Change in Total Average Marginal Total Variable Marginal Average Total Fixed Average Marginal Average
    Price Quantity Revenue per Direct Materials Direct Labor Variable Cost Total Cost Profit
    Quantity Revenue Revenue Revenue Cost Variable Cost Variable Cost Cost Fixed Cost Cost Profit
    additional unit per unit
    1,000.00 4,500 ########## 1,000.00 - 900,000.00 ########### 2,250,000.00 - - 500.00 1,000,000.00 222.22 ########## - ######### 277.78
    950.00 5,000 500 ########## 950.00 ######### 500.00 1,000,000.00 ########### 2,500,000.00 250,000.00 500.00 500.00 1,000,000.00 200.00 ########## ######## ######### 250.00
    850.00 6,000 1,000 ########## 850.00 ######### 350.00 1,200,000.00 ########### 3,000,000.00 500,000.00 500.00 500.00 1,000,000.00 166.67 ########## ######## ######### 183.33
    750.00 7,500 1,500 ########## 750.00 ######### 350.00 1,500,000.00 ########### 3,750,000.00 750,000.00 500.00 500.00 1,000,000.00 133.33 ########## ######## 875,000.00 116.67
    650.00 8,000 500 ########## 650.00 ######### (850.00) 1,600,000.00 ########### 4,000,000.00 250,000.00 500.00 500.00 1,000,000.00 125.00 ########## ######## 200,000.00 25.00
    550.00 9,000 1,000 ########## 550.00 ######### (250.00) 1,800,000.00 ########### 4,500,000.00 500,000.00 500.00 500.00 1,000,000.00 111.11 ########## ######## ######### (61.11)
    450.00 9,500 500 ########## 450.00 ######### (1,350.00) 1,900,000.00 ########### 4,750,000.00 250,000.00 500.00 500.00 1,000,000.00 105.26 ########## ######## ######### (155.26)
    350.00 10,000 500 ########## 350.00 ######### (1,550.00) 2,000,000.00 ########### 5,000,000.00 250,000.00 500.00 500.00 1,000,000.00 100.00 ########## ######## ######### (250.00)
    250.00 12,000 2,000 ########## 250.00 ######### (250.00) 2,400,000.00 ########### 6,000,000.00 1,000,000.00 500.00 500.00 1,000,000.00 83.33 ########## ######## ######### (333.33)
    150.00 13,000 1,000 ########## 150.00 ######### (1,050.00) 2,600,000.00 ########### 6,500,000.00 500,000.00 500.00 500.00 1,000,000.00 76.92 ########## ######## ######### (426.92)

    Given:
    Fixed Cost 1,000,000.00
    Direct Materials per unit 200.00
    Direct Labor per unit 300.00

    Marginal Marginal
    Change in Total Average Marginal Total Variable Marginal Average Total Fixed Average Marginal Average
    Price Quantity Revenue per Direct Materials Direct Labor Variable Cost Total Cost Profit
    Quantity Revenue Revenue Revenue Cost Variable Cost Variable Cost Cost Fixed Cost Cost Profit
    additional unit per unit
    1,000.00 4,500 ########## 1,000.00 - 900,000.00 ########### 2,250,000.00 - - 500.00 1,000,000.00 222.22 ########## - ######### 277.78
    950.00 5,000 500 ########## 950.00 ######### 500.00 1,000,000.00 ########### 2,500,000.00 250,000.00 500.00 500.00 1,000,000.00 200.00 ########## ######## ######### 250.00
    850.00 6,000 1,000 ########## 850.00 ######### 350.00 1,200,000.00 ########### 3,000,000.00 500,000.00 500.00 500.00 1,000,000.00 166.67 ########## ######## ######### 183.33
    750.00 7,500 1,500 ########## 750.00 ######### 350.00 1,500,000.00 ########### 3,750,000.00 750,000.00 500.00 500.00 1,000,000.00 133.33 ########## ######## 875,000.00 116.67
    650.00 8,000 500 ########## 650.00 ######### (850.00) 1,600,000.00 ########### 4,000,000.00 250,000.00 500.00 500.00 1,000,000.00 125.00 ########## ######## 200,000.00 25.00
    550.00 9,000 1,000 ########## 550.00 ######### (250.00) 1,800,000.00 ########### 4,500,000.00 500,000.00 500.00 500.00 1,000,000.00 111.11 ########## ######## ######### (61.11)
    450.00 9,500 500 ########## 450.00 ######### (1,350.00) 1,900,000.00 ########### 4,750,000.00 250,000.00 500.00 500.00 1,000,000.00 105.26 ########## ######## ######### (155.26)
    350.00 10,000 500 ########## 350.00 ######### (1,550.00) 2,000,000.00 ########### 5,000,000.00 250,000.00 500.00 500.00 1,000,000.00 100.00 ########## ######## ######### (250.00)
    250.00 12,000 2,000 ########## 250.00 ######### (250.00) 2,400,000.00 ########### 6,000,000.00 1,000,000.00 500.00 500.00 1,000,000.00 83.33 ########## ######## ######### (333.33)
    150.00 13,000 1,000 ########## 150.00 ######### (1,050.00) 2,600,000.00 ########### 6,500,000.00 500,000.00 500.00 500.00 1,000,000.00 76.92 ########## ######## ######### (426.92)

    You might also like