The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total cost to manufacture 1, 200 units is closest to:
A)$68, 520
B)$100, 920
C)$111, 720
D)$90, 120

Question

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product:  The best estimate of the total cost to manufacture 1, 200 units is closest to:
A)$68, 520 
B)$100, 920 
C)$111, 720 
D)$90, 120

Quizplus · Accepted Answer

From earlier parts, the total fixed cost is $54, 000 and the variable cost per unit is $39.10.
Total cost = Total fixed cost + Total variable cost
= $54, 000 + ($39.10 per unit × 1, 200 units)
= $54, 000 + $46, 920
= $100, 920

The Following Production and Average Cost Data for Two Levels