Question

g A review of Parson Corporation's accounting records found that at a volume of 146,000 units, the variable and fixed cost per unit amounted to $8 and $5, respectively. On the basis of this information, what amount of total cost would Parson anticipate at a volume of 138,200 units?

Answer 1

Answer:

The total cost is $1,796,600

Explanation:

Fixed costs are costs that do not change with the change in the volume of good or service sols, but under certain circumstances, when the fixed cost is a direct cost, it can vary on a per unit basis.

Variable costs are costs that change with the change of the volume of goods or service.

Total number of units = 138,200

variable cost per unit = $8

Total variable cost = 8 × 138,200 = 1,105,600

Fixed cost per unit = $5

Total fixed cost = 5 × 138,200 = 691,000

Total cost = 1,105,600 + 691,000 = $1,796,600