Chapter 11 analysis

Shantae Lovett

ACC 202

Ryan Riches

February 18, 2013

Chapter 11 analysis

I chose to analyze chapter 11 because it confused me the most. When starting on this chapter it really left me in a daze trying to figure out everything from fixed cost to mixed cost. Fixed costs are costs that do not change when the quantity of output changes (Edmonds, McNair & Olds, 2012).

For example, let's assume it costs Company Odom&Lovett 1,000,000 to produce 1,000,000 watches per year (1 per watches). This 1,000,000 cost includes 500,000 of administrative, insurance, and marketing expenses, which are generally fixed. If Company Odom&Lovett decides to produce 2,000,000 watches next year, its total production costs may only rise to 1,500,000 ( per watches)...