Answer:
Instructions are below.
Explanation:
Giving the following information:
Toys produced 40,000
Total variable costs= $720,000
Total fixed costs= $600,000
Total costs= $1,320,000
Between the relevant range, the fixed costs remain constant.
First, we need to calculate the unitary variable cost:
Unitary variable cost= total variable cost/total number of units
Unitary variable cost= 720,000/40,000= $18 per unit.
For 80,000 units:
Total variable cost= 18*80,000= 1,440,000
Fixed costs= 600,000
Total cost= $2,040,000
For 120,000 units:
Total variable cost= 18*120,000= 2,160,000
Fixed costs= 600,000
Total cost= $2,760,000
The Total fixed cost is = $2,760,000 of Child Play Inc. manufactures electronic toys
Giving the information as per question given are:
Toys produced 40,000
Total variable costs= $720,000
Total fixed costs= $600,000
Total costs= $1,320,000
Now, Between the relevant range, then the fixed costs is remaining constant.
Firstly, we need to calculate the unitary variable cost that is:
The formula of Unitary variable cost is= total variable cost/total number of units
Then Unitary variable cost= 720,000/40,000= $18 per unit.
After that For 80,000 units:
Then Total variable cost is = 18*80,000= 1,440,000
Then Fixed costs is = 600,000
Then Total cost = $2,040,000
For 120,000 units:
Total variable cost= 18*120,000= 2,160,000
Fixed costs= 600,000
Thus, the Total cost is = $2,760,000
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