Question 1: The ABC Company estimates that its total cost to send out invoices, receive payments, deposit payments, and update the accounting records was $70.00 per sales invoice in 2016. In 2016, there were 700,000 sales invoices and total fixed costs of $1,000,000 relating to these invoices.
a) What was the total cost and total cost per invoice in 2017?
b) If the company budgets 500,000 sales invoices in 2017, what will be the expected total cost and expected cost per unit for 2017?
Question 2: A company estimates that its total cost to acquire materials, setup machines, and produce products is $150.00 per unit produced in 2016. In 2016, there we 100,000 units produced and variable cost per unit produced totaled $75.00. In 2017, the company expects total fixed costes and variable costs per unit to be the same as in 2016.
If the company budgets to produce 125,000 units in 2017, what are the expected total cost and expected cost per unit for 2017?
Question 3: The ABC Company collected the following annual information on total net sales and total operating costs:
|
Year
|
Total Net Sales
|
Total Operating Costs
|
|
2015
|
$21,000
|
$16,000
|
|
2016
|
$22,000
|
$16,400
|
IN 2017, total net sales are budgeted to be $ 24,000. Using the high-low method, prepare an estimate of total operating costs for 2017, assuming total fixed costs as a percentage of total net sales are expected to be the same in 2017 as in 2015 and 2016.