Question

Total costs for Locke​ & Company at 120 comma 000 units are $ 329 comma 000​, while total fixed costs are $ 175 comma 000. The total variable costs at a level of 260 comma 000 units would be​ (Round intermediate calculations to the nearest cent and the final answer to the nearest​ dollar.)

Answer 1

Answer:

$332,800

Explanation:

Total cost is the sum of the fixed and variable costs.

Like the total sales, the total variable cost is also affected by the level of activities or units produced/sold.

Total variable cost = variable cost per unit * number of units

Hence, given that

Total costs at 120,000 units is $329,000 and total fixed cost is $175,000

Total variable costs = $329,000 - $175,000

= $154,000

Unit variable cost = $154,000/120,000

= $1.28

At 260,000 units,

Total variable cost

= $1.28 * 260,000

= $332,800

 

Answer 2

Answer:

For 260,000 units Variable Costs are = $ 154,000/120,000 * 260,000= $1.2833* 260,000=  $ 333,667

Explanation:

Locke​ & Company

Total costs                 $ 329, 000  

Less Fixed Costs   $ 175, 000

Variable Costs $ 154,000  for 120,000 units

For 1 unit Variable Costs are = $ 154,000/120,000= $1.2833

For 260,000 units Variable Costs are = $ 154,000/120,000 * 260,000= $1.2833* 260,000=  $ 333,667

The total Costs for 260,000 units would be determined by  adding Variable Costs and Fixed Costs.

We Suppose the fixed costs are same then = 333,667 + 175,000= $ 508,667