Question

The following data pertain to activity and costs for two recent months October November Activity level in units 5.000 10000 Variable costs $10000 Foxed Costs $30000 Mored Costs S20000 Total Costs $6000) $75.000 Assuming that these activity levels are within the relevant range, the mood costs for November were Mumple Choice o 40.000 O $35.000 < Prev 20 of 20 Ned> WE R T Y u B D F G H J op L K VON ME

Answer 1

Total variable cost when 5,000 units were produced = $10,000

Variable cost per unit = Total variable cost/Number of units

= 10,000/5,000

= $2

Total variable cost = Number of units produced x variable cost per unit

Total variable cost of producing 10,000 unit = 10,000 x 2

= $20,000

Fixed cost of $30,000 will not increase when output is increased from 5,000 units to 10,000 units in November

Total cost = Variable cost + Fixed cost + Mixed cost

75,000 = 20,000 + 30,000 + Mixed cost

Mixed cost = $25,000

Third option is the correct option

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