Question

George Company has a relevant range of​ 150,000 units to​ 400,000 units. The company has total fixed costs of​ $527,000. Total fixed and variable costs are​ $622,500 at a production level of​ 176,000 units. The variable cost per unit at​ 350,000 units is

Answer 1

Answer: $0.54

Explanation:

Total cost = Fixed cost + Variable cost

$622,500 = $527,000 + Variable cost

Variable cost = $622,500 - $527,000

Variable cost = $95,500

Variable cost per unit will be calculated as the variable cost divided by the production unit. This will be:

= $95,500/176,000

= $0.54

The variable cost per units is $0.54.