Total variable costs at 45,000 units would be
A)$135,000.
B)$202,500.
C)$246,500.
D)unknown.

Question

Total variable costs at 45,000 units would be
A)$135,000. 
B)$202,500. 
C)$246,500. 
D)unknown.

Quizplus · Accepted Answer

The given information suggests that the total variable costs are a linear function of the number of units produced. However, we are not provided with the equation of this function, so we cannot directly calculate the variable cost at 45,000 units. The only information we have is that the variable cost at 30,000 units is $135,000. Without any more information, we can assume that the variable cost will increase as the number of units produced increases. Therefore, it is reasonable to estimate that the variable cost at 45,000 units will be higher than $135,000. The only choice that reflects a higher variable cost than $135,000 is B, $202,500.

Total Variable Costs at 45,000 Units Would Be