Homework Answers
Calaculation of total variable cost at the level of 277000 units:
Given that,
Total costs = $165000
Fixed costs = $84000
Units produced = 268000 units
That implies,
Variable costs
= Total costs - fixed costs = $165000 - $84000 = $81000
Variable cost per unit
= Total variable cost/units produced = $81000/268000 = $0.30 per unit
Therefore,
Total variable cost at level of 277000 units
= no. of units × variable cost per unit
= 277000 units × $0.30
= $83100
The correct option is
- D. $83100
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