Varigon Co

question 14

Essay

Varigon Co.produces and sells three products-Household,Commercial,and Industrial,and has total fixed costs of $52,000.Sales and cost data follow:
Calculate the break-even point in composite units.

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Definitions:

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Variable Cost

Expenses that change in proportion to the volume of goods or services produced by a business.

Activity

An event that causes the consumption of overhead resources in an organization.

Cost Driver

A factor that causes a change in the cost of an activity, such as machine-hours or labor hours, used in determining pricing and profitability.