Sabina and Associates has the following current year costs:
$\begin{array}{ll}
\text { Variable costs } &\text { $ \$ 4 $ per unit }\
\text {Fixed costs } &\$20000\
\end{array}$

Next year,the company plans to enter into an arrangement with a supplier that will result in a 15 per cent decrease in variable costs.They also plan on reducing their rental space,which will decrease fixed costs by 10 per cent.
Required:
A. What will be the new equation to predict total costs?
B. If next year's production is expected to be 10000 units, what will be total estimated costs?

Question

Sabina and Associates has the following current year costs:
$\begin{array}{ll}
  \text { Variable costs  } &\text { $ \$ 4 $ per unit }\
 \text {Fixed costs  } &\$20000\
\end{array}$
 
Next year,the company plans to enter into an arrangement with a supplier that will result in a 15 per cent decrease in variable costs.They also plan on reducing their rental space,which will decrease fixed costs by 10 per cent.
Required:
 A. What will be the new equation to predict total costs?
B. If next year's production is expected to be 10000 units, what will be total estimated costs?

Quizplus · Accepted Answer

The Answer of Sabina and Associates has the following current year costs:
$\begin{array}{ll}
  \text { Variable costs  } &\text { $ \$ 4 $ per unit }\
 \text {Fixed costs  } &\$20000\
\end{array}$
 
Next year,the company plans to enter into an arrangement with a supplier that will result in a 15 per cent decrease in variable costs.They also plan on reducing their rental space,which will decrease fixed costs by 10 per cent.
Required:
 A. What will be the new equation to predict total costs?
B. If next year's production is expected to be 10000 units, what will be total estimated costs?

Sabina and Associates Has the Following Current Year Costs Variable costs $4 per unit Fixed costs $20000\begin{array}{ll} \text { Variable costs } &\text { \( \$ 4 \) per unit }\\ \text {Fixed costs } &\$20000\\\end{array} Variable costs Fixed costs ​ $4 per unit $20000​

Sabina and Associates Has the Following Current Year Costs $\begin{array}{ll} \text { Variable costs } &\text { \( \$ 4 \) per unit }\\ \text {Fixed costs } &\$20000\\\end{array}$