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