Exhibit 5-2
Manchester Company is a small company that has hired you to help them estimate costs.They present you with the following information from the company's most recent fiscal year.
Sales (2,000 units)$1,000,000
Cost of goods sold (24% of sales)240,000
Store supervisor's annual salary 65,000
Annual operating costs 70,000
Annual advertising and promotion 10,000
Sales commissions (5% of sales)50,000
-Refer to Exhibit 5-2.What was the variable cost per unit for the company's most recent fiscal year?
A)$120 per unit
B)$180 per unit
C)$145 per unit
D)$150 per unit
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

The cost of goods sold is 24% of sales, so it was $240,000 for 2,000 units. 
240,000 / 2,000 units = $120 per unit for the variable cost.

Exhibit 5-2 Manchester Company Is a Small Company That Has Hired You