When 5,000 units are produced variable costs are $35 per unit and total costs are $200,000. What are the total costs when 8,000 units are produced?
A) $200,000.
B) $305,000.
C) $240,000.
D) None of the other answers are correct.
E) Total costs cannot be calculated based on the information presented.

Question

Quizplus · Accepted Answer

Variable costs for 8,000 units are 8,000 * $35 = $280,000. Fixed costs are $200,000 - (5,000 * $35) = $25,000. Total costs for 8,000 units are $280,000 + $25,000 = $305,000.

When 5,000 Units Are Produced Variable Costs Are $35 Per