Question

Total fixed costs for Green Planes Inc. are​ $150,000. Total​ costs, including both fixed and​ variable, are​ $600,000 if​ 140,000 units are produced. The total variable costs at a level of​ 230,000 units would be​ (Round any intermediary calculations to the nearest​ cent.) A. ​$273,913 B. ​$246,429 C. ​$738,300 D. ​$985,714

Answer 1

Answer:

The correct answer is C.

Explanation:

Giving the following information:

Total fixed costs for Green Planes Inc. are​ $150,000. Total​ costs, including both fixed and​ variable, are​ $600,000 if​ 140,000 units are produced.

First, we need to calculate the unitary variable cost:

Unitary variable cost= (total cost - fixed cost) / number on units

Unitary variable cost= (600,000 - 150,000)/ 140,000= $3.21 per unit

Now, we can calculate the total variable cost for 230,000 units:

Total variable cost= 3.21*230,000= $738,300