Fixed versus variable cost behavior Bradford Trophies makes and sells trophies it distributes to

Fixed versus variable cost behavior Bradford Trophies makes and sells trophies it distributes to little league ballplayers. The company normally produces and sells between 10,000 and 13,000 trophies per year. The following cost data apply to various activity levels.

Number of trophies

11,000

12,000

13,000

Total costs incurred

10,000   

Fixed

$60,000   

Variable

50,000   

Total costs

$110,000   

Cost per unit    

Fixed

$6.00   

Variable

5   

Total cost per trophy

$11.00   

Required

a. Complete the preceding table by filling in the missing amounts for the levels of activity shown in the first row of the table. Round all cost per unit figures to the nearest whole penny.

b. Explain why the total cost per trophy decreases as the number of trophies increases

 

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