SeyChy Collected the Following Data on Manufacturing Costs and Activity

question 56

Essay

SeyChy collected the following data on manufacturing costs and activity cost drivers for two months: $\begin{array}{lcc}&\text { November }& \text { December }\\\text { Activity level in units } & 3,000 & 7,500 \\\\\text { Variable costs } & £ 7,500 & £ ? \\\text { Fixed costs } & 25,000 & ? \\\text { Mixed costs } & 11,500& 13,750\\\text { Total manufacturing costs } &? &?\end{array}$

a.What is total variable cost per unit?
b.What is the total fixed cost?
c.What is the estimated total manufacturing cost for January if the budgeted activity in January is 6,000 units?

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Definitions:

Operating Income

Income generated from the normal business operations of a company, excluding expenses from interest and taxes.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment.

Minimum Return on Investment

The lowest acceptable rate of return on an investment, used to assess potential investments' viability.

Support Department Allocations

The process of distributing overhead costs from service departments to producing departments within a company.