Answer:
Bracelet A, Bracelet B
Total fixed cost = $15,000 $12,400
Total variable cost = $65 $77
Total Avoidable cost = $8,829 $6,941
Explanation:
According to the scenario, the given data are as follows:
For Bracelet A
Cost of material = $29
Cost of labor = 36
Advertising cost = 8,800
Annual depreciation = 6,200
For Bracelet B
Cost of material = $41
Cost of labor = 36
Advertising cost = 6,900
Annual depreciation = 5,500
So, Fixed cost for each products = Advertising cost + Annual depreciation
For Bracelet A,
Fixed Cost = 8,800 + 6,200 = 15,000
For bracelet B,
Fixed cost = 6,900 + 5,500 = 12,400
Now, Variable cost = Cost of material + Cost of labor
For Bracelet A
Variable cost = 29 + 36 = 65
For Bracelet B
Variable cost = 41 + 36 = 77
And Avoidable cost = Cost of material + Advertising cost
For Bracelet A,
Avoidable cost = 29 + 8,800 = 8,829
For Bracelet B
Avoidable cost = 41 + 6,900 = 6,941
