Reference no: EM131729429

Question #1

a) A company estimates that its total cost to send out invoices, receive payments, deposit the payments, and update accounting records was $25 per sale in 2015. In 2015, there were 150,000 sales and fixed costs of $750,000. In 2016, the company expects total fixed costs and variable costs per unit to be the same as in 2015. If the company budgets 152,000 sales in 2016, what are the expected total costs and expected costs per unit for 2016?

b) Assume the same facts as in part a, except the company expects 147,000 sales in 2016. What are the expected total costs and expected costs per unit for 2016?

Question #2

a) A company estimates that its total cost to acquire materials, set up machines, and produce products is $53 per unit produced in 2015. In 2015, there were 250,000 units produced and variable costs per unit produced totaled $33. In 2016, the company expects total fixed costs and variable costs per unit to be the same as in 2015. If the company budgets to produce 255,000 units in 2016, what are the expected total costs and expected costs per unit for 2016?

b) Assume the same facts as in part a, except the company expects to produce 246,000 units in 2016. What are the expected total costs and expected costs per unit for 2016?

Question #3

The Bear Company collected the following annualinformation on total net sales and total operating costs:

Year	Total Net Sales	Total Operating Costs
2014	$19,600,000	$12,400,000
2015	$20,800,000	$12,700,000

In 2016, total net sales are budgeted to be $21,600,000. Using the high-low method, prepare an estimate of total operating costs for 2016, assuming total fixed costs and variable costs as a percentage of total net sales are expected to be the same in 2016 as in 2014 and 2015.