Reference no: EM132689417
Here are the costs that are incurred by Winkipop Ltd, a surfboard producer, on a monthly basis:
Factory rent per month $20 000 Insurance per month $1000
Factory supervisor's salary per month $5000
Cost of foam core of each surfboard $150
Cost of fibreglass used on each surfboard $45
Cost of resin used on each surfboard $25
Surfboard shaper labour cost for each surfboard $55
Surfboard sander labour cost for each surfboard $75
Problem 1: You are required to identify which costs are variable and fixed, and then come up with a formula to predict what the total cost will be for a given level of production. You are then to apply the formula to calculate the total costs that would be incurred in producing 500 surfboards.
Problem 2: With respect to costs, what do we mean by the relevant range?
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: Identify which costs are variable and fixed, You are then to apply the formula to calculate the total costs that would be incurred in producing 500 surfboards.
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