The process of preparing a production cost budget

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Reference no: EM131539313

1. Aaron's chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were: Materials cost $4,750,Labor cost 2,850, Rent 1,500, Depreciation 2,500 Other fixed costs 3,200 Materials and labor are the only variable costs. If production and sales are budgeted to increase to 150 chairs in August, how much is the expected total variable cost on the August budget?

2. Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much?

Sales $50,000

Variable Costs $9,700

Fixed Costs $28,000

3.Susan is trying to decide whether or not to attend college during the next 12-week session. She has the following options: 1. Attend college full-time at a cost of $1,200. 2. Attend college part-time at a cost of $500 and work part-time earning $1,500. 3. Work full-time earning $4,700. What is Susan's incremental profit if she chooses option 3 over option 2?

Reference no: EM131539313

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