Question

Harper Inc. has fixed costs of $660,000 when it produces 375,000 units. Its total variable costs...

Harper Inc. has fixed costs of

$660,000

when it produces

375,000

units. Its total variable costs are

$120,000.

When Harper Inc. produces

460,000

​units, its total variable costs will be

A. 120,000

B. 171,600

C. 119,600

D. 147,200

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Answer #1

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Computation of variable cost per unit with 375000 unit
a Variable cost 120,000
b Total unit produced 375000
c=a/b Unit variable cost 0.32
Computation of variable cost for 460000 unit
Variable cost = 460000*.32 147200
Correct answer is option D. 147200
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