Chapter 21, Problem 15E

To determine

Introduction:

Variable cost refers to the costs or expenses incurred by an entity that varies with the level of production output, if there is no production then the variable cost becomes nil,

Whereas fixed costs refer to the fixed expenses of the entity which will be necessarily incurred to start the production activity, even at zero level of production, the fixed costs exists and does not become nil.

To calculate:

a)Total variable costs for the next period.

b) Total fixed cost