Answer:
Total cost= $190,000
Explanation:
Giving the following information:
Total manufacturing costs are $170,000 when 20,000 packages are produced.
The total variable costs are $80,000 at 20,000 units.
First, we need to determine the unitary variable cost and total fixed costs.
Unitary variable cost= total variable cost/ number of units
Unitary variable cost= 80,000/20,000= $4 per unit
Total fixed costs= total cost - total variable cost
Total fixed costs= 170,000 - 80,000= $90,000
<u>Now, we need to determine the total cost of 25,000 units.</u>
Total cost= 90,000 + 4*25,000= $190,000