Urban Auto Glass specializes in the repair and replacement of
Urban Auto Glass specializes in the repair and replacement of windshields for passenger vehicles. Variable and fixed costs related to installation activities for the most recent month (July) are listed below:
Required:
1. Calculate the per unit amounts for each of the variable expense and fixed expense items in July.
2. Management expects that 1,200 windshields will be installed in August and that this level of activity is within the relevant range for all variable and fixed expenses. Calculate
a. The total expense for each of the variable and fixed cost items above.
b. The per unit amounts for each of the variable and fixed cost items above. Explain any differences in the per unit amounts between July and August.
3. Identify some factors that might cause variable costs per unit to change if the actual level of activity in a given month falls above or below the relevant range.
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