Question

A firm is reviewing a project with labor cost of $9.00 per unit, raw materials cost of $25.25 a unit, and fixed costs of $13,000 a month. sales are projected at 11,000 units over the 3-month life of the project. what are the total variable costs of the project? $194,875 $389,750 $363,750 $277,750 $376,750

Answer 1

Answer:

$376,750

Explanation:

Firstly, eliminate unneeded information. This question asks for the costs of variable costs, or fees that can possibly change. Becuase of this, we can ignore the $13,000 a month fee, because this is not a variable cost, meaning that it is not going to change.

Secondly, multiply your variable costs to match the units needed. We have $9,000 a unit and $25,000. The estimate is 11,000 units, so set your equation up like so- (9,000 X 11,000) + (25,000 X 11,000) = $376,750.