Sales increased from Year 1 (with sales of 800,000) to Year 2 (with sales of 900,000); The DOL  (Degree of Operating Leverage) in Year 1 is 5.0 and EBIT in Year 2 is 81,250. What is the fixed cost?

X Corp has total cost at various activity level for 2020, which are presented below

 

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Month March April May June Units Cost 250.00 3,800.00 350.00 4,400.00 300.00 4,100.00 500.00 5,300.00 The costs above consist of supplies cost, labor cost and utilities. The breakdown of these costs in April 2020 are as follows: Supplies cost (fixed cost) of P 2,000; labor cost (variable cost) of P 700 and utilities (mixed cost) of P 1,700. What would be the total cost if there will be 700 units sold for year 2021? Month March April May June Units Cost 250.00 3,800.00 350.00 4,400.00 300.00 4,100.00 500.00 5,300.00 The costs above consist of supplies cost, labor cost and utilities. The breakdown of these costs in April 2020 are as follows: Supplies cost (fixed cost) of P 2,000; labor cost (variable cost) of P 700 and utilities (mixed cost) of P 1,700. What would be the total cost if there will be 700 units sold for year 2021?

Answer rating: 100% (QA)

To calculate the total cost for 700 units sold in the year 2021 we need to find the relevant cost co... View the full answer