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If varable cost of packaging is reduced from $8 per unit to $2 per unit how will it affect the following?
1.) Life cycle cost per unit- INCREASE
DECREASE. NO EFFECT2). Internal environmental cost- INCREASE. DECREASE. NO EFFECT
3.)Total fixed production cost- INC. DEC. NO EFFECT
4.)Extermal environment cost- INC. DEC. NO EFFECT
5.) Selling price per unit- INC. DEC. NO EFFECT
Thanks in advance
Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – they have answers and explanations.
Also, have you typed out the entire question? I ask because, for example, if the cost of packing is reduced then they could reduce the selling price, but that does not mean that they will reduce the selling price. It depends on their pricing policy.
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