- Total Variable Cost Formula Quantity Of Output X Variable Cost Per Unit Of Output W Total Variable Cost Formula Total 1 (196.65 KiB) Viewed 43 times
A firm would like to estimate the total variable costs that are a part of their total cost of production. Please refer
to the graphics at the top of this page for the formula this firm uses to calculate total variable cost.
The variable cost per unit of output is $25 per unit.
The quantity of output is the element in the total variable cost equation that is variable. The firm has
determined that the mean (u) for quantity of output is 10,000 units with a standard deviation (G) of 1,000 units.
Step 1
Assume the "quantity of output" is normally distributed.
Conduct simulation analysis to estimate the total variable costs. Use a u = 10,000 and a O = 1,000.
Run 100 simulations.
'Step 2
Graph the estimates of total variable costs based upon your simulation analysis. Any type of graph is
acceptable but it should be professional quality.
Submit:
Graph
Spreadsheet of the 100 simulqtion
Total Variable = Cost Formula Quantity of Output x Variable Cost Per Unit of Output W Total Variable Cost Formula Total Variable Cost Total Variable Cost Formula Management Consulted BUS 520-DATA ANALYTICS Simulation Analysis A firm would like to estimate the total variable costs that are a part of their total cost of production. Please refer to the graphics at the top of this page for the formula this firm uses to calculate total variable cost. The variable cost per unit of output is $25 per unit. The quantity of output is the element in the total variable cost equation that is variable. The firm has determined that the mean (u) for quantity of output is 10,000 units with a standard deviation (0) of 1,000 units. REQUIREMENTS Step 1 Group work is permitted. Assume the "quantity of output" is normally distributed. Conduct simulation analysis to estimate the total variable costs. Use a μ = 10,000 and a σ = 1,000. Run 100 simulations. Number of Units Produced x Variable Cost Per Unit. Quantity Of Output x Variable Cost Per Unit Of Output Step 2 Graph the estimates of total variable costs based upon your simulation analysis. Any type of graph is acceptable but it should be professional quality. Submit: Graph (put everyone's name on the graph). • Spreadsheet of the 100 simulations (put everyone's name on the spreadsheet). Total Variable Cost Formula Direct Labor Cost + Cost of Raw Material + Variable Manufacturing Overhead