Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. Discuss the pros and cons of each loan.

You need a $\$ 60,000$ loan.

$\quad$ Option $1$: a $30$-year loan at an $\mathrm{APR}$ of $7.15 \%$

$\quad$ Option $2$: a $15$-year loan at $6.75\%$

For the current year ended March 31, Chewy Company expects fixed costs of $900,000, unit variable cost of$75, and a unit selling price of $120.

b. Compute the sales (units) required to realize income from operations of$112,500.

The annual fixed costs for owning a small sedan are $1289, assuming the car is completely paid for. The cost to drive the car is approximately$0.15 per mile. Write a linear equation that relates the cost C and the number x of miles driven annually.

If Intervale Railway’s fixed costs total $90,000 per month, the variable cost per passenger is$45, and tickets sell for $75, what is the breakeven point in units? a. 1,200 passengers b. 2,000 passengers c. 225,000 passengers d. 3,000 passengers

For the current year ended March 31, Benatar Company expects fixed costs of $1,250,000, a unit variable cost of$140, and a unit selling price of $100. b. Compute the sales (units) required to realize income from operations of$150,000.

In the manufacture of a product, the marginal cost of producing $x$ units is $C^{\prime}(x)$ and fixed costs are $C(0)$. Find the total cost function $C(x)$ when:

(a) $C^{\prime}(x)=3 x+4, C(0)=40$

(b) $C^{\prime}(x)=a x+b, C(0)=C_0$

Story Park competes with Splash World by providing a variety of rides. Story sells tickets at $50 per person as a one-day entrance fee. Variable costs are$10 per person, and fixed costs are $240,000 per month. Requirement

1. Compute the number of tickets Story must sell to break even. Perform a numerical proof to show that your answer is correct.

For the coming year, Paladin Inc. anticipates fixed costs of $\$120,000$, a unit variable cost of $\$60$, and a unit selling price of $\$90$. The maximum sales within the relevant range are $\$900,000$.

Compute the maximum possible income from operations.

Refer to the information presented in the preceding exercise. Assume that Video Avenue can avoid $39,000 of direct fixed costs by dropping the DVD product line. Prepare a differential analysis to show whether Video Avenue should stop selling DVDs.

On a separate sheet of paper, write the letter of the key term that best matches each definition below. total fixed costs

$$\begin{matrix} \text{a. change in quantity supplied} & \text{ g. production function }\\ \text{b. diminishing returns } & \text{h. Law of Supply }\\ \text{c. fixed costs } & \text{ i. total cost }\\ \text{d. marginal analysis } & \text{ j. change in supply }\\ \text{e. marginal product } & \text{k. overhead }\\ \text{f. marginal revenue } & \text{ l. total product}\\ \end{matrix}$$

Alden Co.'s monthly unit sales and total cost data for its operating activities of the past year follow, Management wants to use these data to predict future fixed and variable costs

Required

1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method,

2. Use the results from part 110 predict future total costs when sales volume is (a) 200,000 units and (b) 300,000 units.

Under absorption costing, a company had the following per unit costs when 10,000 units were produced.

$$\begin{array}{lr} \text{Directlabor}&\text{\$ 2}\\ \text{Direct materials}&\text{3}\\ \text{Variable overhead}&\underline{\text{\hspace{5pt}4}}\\ \text{Total variable cost}&\text{9}\\ \text{Fixed overhead (\$50,000/10,000 units)}&\underline{\text{\hspace{5pt}5}}\\ \text{Total product cost per unit}&\underline{\underline{\text{\$14}}}\\ \end{array}$$

The company sells its product for $50 per unit. Due to new regulations, the company must now incur$2 per unit of hazardous waste disposal costs and $8,500 per year of fixed hazardous waste disposal costs. Compute the contribution margin per unit. including hazardous waste disposal costs.

Brent, Inc., manufactures wool sweaters. Costs incurred in making 55,000 sweaters in August included $330,000 of fixed manufacturing overhead. The total absorption cost per sweater was$38.60. Required: a. Calculate the variable cost per sweater.

The following exercise demonstrate applications of linear functions. Analyze the information given to determine the equation of the relevant line or lines. Use the linear equation to determine the requested information. The Tie Shop sells its ties for $21 each. The shop has weekly fixed costs of$845, and each tie costs $12. How many ties must be sold to make a profit?