Exercise 22-02 b-d (Part Level Submission)

Crane Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as shown below.

Output in Units		Rent Expense		Direct Materials
1,000		$5,660		$4,528
2,000		5,660		6,900
3,000		9,056		6,900
4,000		9,056		9,200
5,000		9,056		11,500
6,000		9,056		13,800
7,000		9,056		16,100
8,000		9,056		18,400
9,000		11,320		33,168
10,000		11,320		39,620
11,000		11,320		49,808

(b)

	Your answer is correct.

Determine the relevant range of activity for this product.

The relevant range of activity for this product

1,000 2,0003,000 8,0009,000 11,000

units

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(c)

	Your answer is incorrect. Try again.

Calculate the variable costs per unit within the relevant range. (Round answer to 2 decimal places e.g. 2.25.)

Variable costs per unit per unit

$

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