Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 8, Problem 2P
To determine
Identify the fixed cost and variable cost.
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if they are pre-startup expenses ,mark ( / ) and if not mark (x ) in the given box
NO
EXPENSE
J/ x
1
Paid $ 2,500 to ABC Company for the market survey
Bought a furniture to the office for $ 6,000
Paid $ 1,500 for the relevant authority council for licenses
Paid $ 3,000 to clean the building
Paid $ 1,000 for premises to get the electricity supply
Paid $ 4,000 for charge to lay cables for computer network
3
4
6.
Bought 10 computers for $ 40,000
Paid $ 4,000 for the preparation of business plan
Expenses for entertainment on the starting day of the business $ 3,000
Expenses for exchanging information with the suppliers $ 1,000
7
8
9
10
ABC Company has a product that sells for $400 per unit and its variable cost per unit is $260. Company’s fixed cost is $840,000. Required:Compute the Contribution Margin.
It is the sum of all costs that are incurred periodically and continuously in order that the project in which an investment has been made may be operated, produce a commodity or service and distribute and sell that commodity or service.
Salvage cost
Profit
Operating cost
Fixed cost
Chapter 8 Solutions
Contemporary Engineering Economics (6th Edition)
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- Some commonly known costs associated with manufacturing operations arelisted below:(a) Paint shop superintendent's salary(b) Labor costs in assembling a product(c) Rent on a factory building(d) Radio-frequency identification (RFID) units embedded in the final productduring shipping ( e) Depreciation on machinery(f) Lubricants used for machines(g) CPU chips used in notebook production(h) The paint used in automobile production(i) Janitorial and custodial salaries(j) Coffee beans used in packaging roasted coffee(k) Sugar used in ice cream production(I) Electricity for the operation of machines(m) Electricity for heating and cooling the factory building(n) The glue used in electronic board productionClassify each cost as being either variable or fixed with respect to volume or level of activity.arrow_forward⦁ ABC Company has a product that sells for $400 per unit and its variable cost per unit is $260. Company’s fixed cost is $840,000. Required: ⦁ What is its contribution margin Ratio? Show computationarrow_forwardSome commonly known costs associated with manufacturing operations arelisted below:(a) Paint shop superintendent's salary(b) Labor costs in assembling a product(c) Rent on a factory building(d) Radio-frequency identification (RFID) units embedded in the final productduring shipping ( e) Depreciation on machinery(f) Lubricants used for machines(g) CPU chips used in notebook production(h) Paint used in automobile production(i) Janitorial and custodial salaries(j) Coffee beans used in packaging roasted coffee(k) Sugar used in icecream production(I) Electricity for operation of machines(m) Electricity for heating and cooling the factory building(n) Glue used in electronic board productionClassify each cost as being either variable or fixed with respect to volume or level of activity.arrow_forward
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