MCG Industries has the following sales and cost data per unit at current production of 10,000 units: If MCG Industries was able to increase production to 20,000 units without having to add extra capacity, what will the total costs be for the company?
A) $145,000
B) $196,000
C) $239,000
D) $290,000

Question

MCG Industries has the following sales and cost data per unit at current production of 10,000 units:  If MCG Industries was able to increase production to 20,000 units without having to add extra capacity, what will the total costs be for the company?
A) $145,000 
B) $196,000 
C) $239,000 
D) $290,000

Quizplus · Accepted Answer

Total Costs = Total Variable Costs + Total Fixed Costs = (Variable cost per unit x 20,000 units) + (Fixed Cost per Unit x original units, 10,000) = ($9.40 x 20,000) + (5.10 x 10,000 units) = $188,000 + 51,000 =$239,000.

MCG Industries Has the Following Sales and Cost Data Per