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(Solution Download) Exercise 18-2 Shingle Enterprises is considering manufacturing a new product. It projects the cost o


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise 18-2

 

Shingle Enterprises is considering manufacturing a new product. It

 

projects the cost of direct materials and rent for a range of

 

output as shown below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Output in Units

 

 

Rent Expense

 

 

Direct Materials

 

1,0005,7504,600
2,0005,7508,280
3,0009,2008,700
4,0009,20011,600
5,0009,20014,500
6,0009,20017,400
7,0009,20020,300
8,0009,20023,200
9,00011,50033,695
10,00011,50040,250
11,00011,50050,600

 

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Determine the relevant range of activity for this

 

product.

 

 

 

 

 

 

 

 

 

 

The relevant range of activity for this product 1,000 Ac??o

 

2,0003,000 Ac??o 8,0009,000 Ac??o

 

11,000res_EAT_1351253429687_0_6634707090607881_003

units

 

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Calculate the variable cost per unit within the relevant range.

 

(Round answer to 2 decimal places, e.g.

 

1.25.)

 

 

 

 

 

 

 

 

 

Variable cost per unit per unit

 

$

 

 

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Indicate the fixed cost within the relevant range.

 

 

 

 

 

 

 

 

 

Fixed cost

 

$

 

 

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