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Essay

Variable or Fixed Cost

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Issue:

Business

 

Written by:

Lynn C

 

Date added:

April 26, 2016

 

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Grade:

A

 

No of pages / words:

1 / 218

 

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5665 times

 

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Using this we can calculate expected costs if production increases. For 6000 hamburgers annually the cost of raw materials is $3900 while at 8000 hamburgers it is $5200. Since the facility rent is unchanged with respect to the number of hamburgers. It's per unit cost decreases respectively. 6000 hamburgers is $1...
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6000 hamburgers is $1.50 per unit and at 8000 it is $1.13. Where as in the beginning the rent overhead is $9.00 per unit. To produce 6000 hamburgers annually there would be $9000 in fixed rent costs plus $3900 in raw materials, totaling $12900 annually. To produce 8000 hamburgers annually there would be $9000 in fixed rent costs plus $5200 in raw materials, totaling $14200 annually...
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