Question: Innovative Computers Pty Ltd produces laptops. Each computer contains a rechargeable battery and LCD screen. Batteries and screens are purchased from an outside supplier for

Innovative Computers Pty Ltd produces laptops. Each computer contains a rechargeable battery and LCD screen. Batteries and screens are purchased from an outside supplier for $96 and $150 each, respectively. The production process is highly automated with an annual depreciation charge of $720 000.

Required

A. What are per computer and total costs of the rechargeable batteries and an LCD screen for 10 computers, 100 computers, 1000 computers and 10 000 computers?

B. What is the depreciation charge per computer if 1000 computers are produced each year? What would it be for 10 000 computers?

C. What kind of cost behaviour is evident in requirements A and B?

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