The chief engineer at Wilson Electronics has proposed the production of a digipad to be sold at a 30 percent markup on full cost.Management estimates that the fixed costs per year will be $150,000 and the variable cost of the digipad will be $28 per unit.If Wilson sells 30,000 digipads, what is the full cost of each unit?
A)$42.90
B)$33.00
C)$36.40
D)$9.90

Question

Quizplus · Accepted Answer

The full cost per unit is calculated by adding the variable cost per unit to the allocated fixed cost per unit. The fixed cost per year is $150,000, and with an estimated sale of 30,000 digipads, the fixed cost per unit is $150,000 / 30,000 = $5. The variable cost per unit is $28. Therefore, the full cost per unit is $28 + $5 = $33.

The Chief Engineer at Wilson Electronics Has Proposed the Production