Required2-30 Cost of goods manufactured. You consider the purchase of a copier for your business. The initialinvestment is $15,000. After one year the copier will be replaced by a new one. In order to calculate the costof one copy, you need to know the depreciation of the copier. The manufacturer of the copier gives you thefollowing information:Number of copies during the year Salvage value after one year10,00020,00030,000$11,500$11,000$10,5001. What are the variable costs?2. Calculate the fixed costs per year and the variable costs per copy.You conclude that the depreciation per copy depends on the number of copies made:Number of copies during the year10,00020,00030,000Cost per copy$3,500/10,000 - $0.35$4,000/20,000 = $0.20$4,500/30,000 = $0.153. Is a changing cost per copy acceptable and or desirable? If not, what would be a solution? Show yourcalculations.

Variable cost are the cost that changes with the change in the level of output, the variable cost…

Answered: You consider the purchase of a copier…

Business

Accounting

You consider the purchase of a copier for your business. The initial

Principles of Accounting Volume 1

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Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...

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Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Required
2-30 Cost of goods manufactured. You consider the purchase of a copier for your business. The initial
investment is $15,000. After one year the copier will be replaced by a new one. In order to calculate the cost
of one copy, you need to know the depreciation of the copier. The manufacturer of the copier gives you the
following information:
Number of copies during the year Salvage value after one year
10,000
20,000
30,000
$11,500
$11,000
$10,500
1. What are the variable costs?
2. Calculate the fixed costs per year and the variable costs per copy.
You conclude that the depreciation per copy depends on the number of copies made:
Number of copies during the year
10,000
20,000
30,000
Cost per copy
$3,500/10,000 - $0.35
$4,000/20,000 = $0.20
$4,500/30,000 = $0.15
3. Is a changing cost per copy acceptable and or desirable? If not, what would be a solution? Show your
calculations.

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