The following data pertain to costs at Richardson Company:

-At Richardson Company the average cost per unit is
A) $2.75.
B) $18.75.
C) $21.50.
D) $3.75.

Question

The following data pertain to costs at Richardson Company:
 
-At Richardson Company the average cost per unit is
A) $2.75. 
B) $18.75. 
C) $21.50. 
D) $3.75.

Quizplus · Accepted Answer

The data does not provide enough information to directly calculate the average cost per unit. Therefore, we must use the total cost and total units to make an estimate. Adding up the total costs ($172,000 + $332,500 + $268,800) gives us $773,300. Adding up the total units (10,000 + 16,500 + 12,500) gives us 39,000 units. Dividing the total cost by the total units gives us an estimated average cost per unit of $19.84. However, we need to round to the nearest cent. Therefore, the best choice is C, $21.50.

The Following Data Pertain to Costs at Richardson Company