Reference: 06-10
The following data have been provided by a retail company that sells a single product. $$\begin{array} { | l | l | l | }
\hline & \text { This Year } & \text { Last Year } \
\hline \text { Units sold } & 200,000 & 150,000 \
\hline \text { Sales revenue } & \$ 1,000,000 & \$ 750,000 \
\hline \text { Less cost of goods sold } & 700,000 & 525,000 \
\hline \text { Gross margin } & 300,000 & 225,000 \
\hline \text { Less operating expenses } & 222,000 & 210,000 \
\hline \text { Net income } & \$ 78,000 & \$ 15,000 \
\hline
\end{array}$$
-What is the best estimate of the company's variable operating expenses per unit
A)$4.17 per unit.
B)$0.24 per unit.
C)$0.90 per unit.
D)$0.71 per unit.

Question

Reference: 06-10
The following data have been provided by a retail company that sells a single product. $$\begin{array} { | l | l | l | } 
\hline & \text { This Year } & \text { Last Year } \
\hline \text { Units sold } & 200,000 & 150,000 \
\hline \text { Sales revenue } & \$ 1,000,000 & \$ 750,000 \
\hline \text { Less cost of goods sold } & 700,000 & 525,000 \
\hline \text { Gross margin } & 300,000 & 225,000 \
\hline \text { Less operating expenses } & 222,000 & 210,000 \
\hline \text { Net income } & \$ 78,000 & \$ 15,000 \
\hline
\end{array}$$
-What is the best estimate of the company's variable operating expenses per unit
A)$4.17 per unit.
B)$0.24 per unit.
C)$0.90 per unit.
D)$0.71 per unit.

Quizplus · Accepted Answer

Variable operating expenses per unit can be estimated by the change in operating expenses divided by the change in units sold. From last year to this year, operating expenses increased by $12,000 ($222,000 - $210,000), and units sold increased by 50,000 units (200,000 - 150,000). Therefore, the variable operating expenses per unit are $12,000 / 50,000 units = $0.24 per unit.

Reference: 06-10 the Following Data Have Been Provided by a Retail

Reference: 06-10
the Following Data Have Been Provided by a Retail