Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?
A) $199,200.
B) $214,800.
C) $234,000.
D) None of the other answers are correct.
E) Total costs cannot be calculated based on the information presented.

Question

Quizplus · Accepted Answer

Total costs = Variable costs + Fixed costsVariable costs per unit = Variable costs / Number of unitsVariable costs per unit = $64,000 / 10,000 units = $6.40 per unitFixed costs = Total costs - Variable costsFixed costs = $180,000 - $64,000 = $116,000Total costs when 13,000 units are produced = Variable costs + Fixed costsTotal costs = ($6.40 per unit * 13,000 units) + $116,000Total costs = $83,200 + $116,000Total costs = $199,200

Total Costs Are $180,000 When 10,000 Units Are Produced; of This