Question #2

a) A company estimates that its total cost to acquire materials, set up machines, and produce products is $25 per unit produced in 2014. In 2014, there were 50,000 units produced and variable costs per unit produced totaled $15. In 2015, the company expects total fixed costs and variable costs per unit to be the same as in 2014. If the company budgets to produce 52,000 units in 2015, what are the expected total costs and expected costs per unit for 2015?

b) Assume the same facts as in part a, except the company expects to produce 49,000 units in 2015. What are the expected total costs and expected costs per unit for 2015?