If 125,000 units are produced, total costs are $380,000. Total fixed costs for White Sails, Inc. are $180,000. The variable cost per unit is
A) $4.48/unit.
B) $1.60/unit.
C) $3.04/unit.
D) $1.44/unit.

Question

Quizplus · Accepted Answer

Total costs = Total fixed costs + Total variable costs
$380,000 = $180,000 + Total variable costs

Total variable costs = $200,000

Variable cost per unit = Total variable costs / Number of units
= $200,000 / 125,000
= $1.60/unit

Therefore, the correct answer is B, which is $1.60 per unit.

If 125,000 Units Are Produced, Total Costs Are $380,000