At an activity level of 10,000 units, variable costs totaled $35,000 and fixed costs totaled $20,800. If 16,000 units are produced and this activity is within the relevant range, then:
A) total cost would equal $89,280.
B) total unit cost would equal $4.80.
C) fixed cost per unit would equal $5.58.
D) total costs would equal $55,800.

Question

Quizplus · Accepted Answer

Variable cost per unit is $35,000 / 10,000 = $3.50. For 16,000 units, variable costs are 16,000 * $3.50 = $56,000. Fixed costs remain $20,800. Total cost = $56,000 + $20,800 = $76,800. Total unit cost = $76,800 / 16,000 = $4.80.

At an Activity Level of 10,000 Units, Variable Costs Totaled