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madreJ [45]
3 years ago
11

An apparel manufacturing plant has estimated the variable cost to be $3.30 per unit. Fixed costs are $1,800,000 per year. Forty

percent of its business is with one preferred customer and the customer is charged at cost. The remaining 60% of the business is with several different customers who are charged $35 per unit. If 150,000 total units are sold in a year, compute the unit cost per item.
Business
1 answer:
erica [24]3 years ago
4 0

Answer:

$15.30

Explanation:

Given that,

Fixed costs = $1,800,000 per year

Variable cost = $3.30 per unit

40% of its business is with one preferred customer.

Total units sold in a year = 150,000

Unit cost per item:

= (Fixed cost ÷ Total units sold) + Variable cost per unit

= ($1,800,000 ÷ 150,000) + $3.30

= $12 + $3.30

= $15.30

Therefore, the unit cost per item is $15.30.

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