Question

XYZ Company sells a single product. The Controller has provided the following cost information for two levels of monthly sales volume. The selling price per unit is $181.30.

Sales volume (units)	8,000	9,000
Cost of sales	$479,200	$539,100
Selling and administrative costs	$736,000	$765,000

  
Total variable cost per unit is estimated to be:

A) $59.90

B) 151.90

C) 88.90

D) 144.90

Answer 1

rate positively ..

			Delta
Sales volume	8000	9000	1000
cost of sales	479,200	539,100	59900
Selling and administrative cost	736,000	765,000	29000
Total	1,215,200	1,304,100	88,900
Variable cost per unit = Change in cost / Change in unit
	88900/1000
	88.9
Therefore answer is option c) 88.9