Question

A soft drink bottler incurred the following factory utility cost: $3,711 for 1,250 cases bottled and $3,790 for 1,800 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to

Answer 1

Answer:

$0.1436

Explanation:

Given that,

$3,711 for 1,250 cases bottled

$3,790 for 1,800 cases bottled

Factory utility cost is a mixed cost containing both fixed and variable components.

Variable cost per unit:

= Difference in costs ÷ Difference in units

= ($3,790 - $3,711) ÷ (1,800 - 1,250)

= $79 ÷ 550

= $0.1436

Therefore, the variable factory utility cost per case bottled is closest to $0.1436.