Harbor Manufacturing is trying to predict the cost associated with producing its anchors.At a production level of 4,000 anchors,Harbor Manufacturing's average cost per anchor is $50.00.If $20,000 of the total costs are fixed,what is the variable cost of producing each anchor?
A)$ 5
B)$ 50
C)$ 45
D)$180,000

Question

Quizplus · Accepted Answer

The total cost for 4,000 anchors is 4,000 * $50 = $200,000. With $20,000 being fixed costs, the variable costs are $200,000 - $20,000 = $180,000. The variable cost per anchor is $180,000 / 4,000 = $45.

Harbor Manufacturing Is Trying to Predict the Cost Associated with Producing