Questions: If the total cost is planned to be 12,000, the total fixed costs are 4,000, and the variable cost per unit of activity is 4, the total activity being planned for is units.
Transcript text: If the total cost is planned to be $12,000, the total fixed costs are $4,000, and the variable cost per unit of activity is $4, the total activity being planned for is $\square$ units.
Solution
Solution Steps
Step 1: Define the relationship between total cost, fixed costs, variable costs, and activity level.
Total Cost = Fixed Costs + (Variable Cost per Unit * Activity Level)
Step 2: Plug in the given values.
We are given:
Total Cost = $12,000
Fixed Costs = $4,000
Variable Cost per Unit = $4
We need to find the Activity Level. Let's represent the activity level with the variable 'x'.