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tia_tia [17]
3 years ago
7

The manufacturing cost of Calico Industries for three months of the year are provided below. Total Cost Production (units) April

$119,400 281,300 May 92,000 162,800 June 99,000 238,000 Using the high-low method, the variable cost per unit and the total fixed costs are a.$0.41 per unit and $27,351 b.$4.14 per unit and $5,470 c.$2.30 per unit and $5,470 d.$0.23 per unit and $54,701
Business
1 answer:
elena55 [62]3 years ago
7 0

Answer:

The correct answer is D.

Explanation:

Giving the following information:

Total Cost Production (units)

April $119,400 281,300

May 92,000 162,800

June 99,000 238,000

<u>To calculate the variable cost per unit and the total fixed cost, we need to use the following formula:</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (119,400 - 92,000) / (281,300 - 162,800)

Variable cost per unit= $0.231

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 119,400 - (0.231*281,300)

Fixed costs= $54,701

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Explanation:

The Net Present Value or NPV is a tool used to evaluate projects. It is used with various other tools to decide whether to undertake a project or not. To calculate the Net Present Value or NPV, we take the present value of the cash inflows provided by the project and deduct the initial cost of the project.  If the NPV is positive, we should proceed with the project and vice versa.

NPV = CF1 / (1+r)  +  CF2 / (1+r)^2  +  ...  + CFn / (1+r)^n  -  Initial Cost

Where,

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NPV = 3200 / (1+0.17)  +  3200 (1+0.17)^2  +  3200 (1+0.17)^3  +  

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4 0
3 years ago
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