HarasCorporation is a wholesalerthatsellsa singleproduct. Managementhas providedthe following cost data for two levels of monthly sales volume. The company sells the product for $141.30 per unit.
The best estimate of the total variable cost per unit is:
$123.40 B. $79.60 C. $57.90 D. $130.70
Variable cost of sales = Change in cost ÷ Change in activity ($405,300 - $347,400) ÷ (7,000 units - 6,000 units) $57,900 ÷ 1,000 units $57.90 per unit Variable selling and administrative cost = Change in cost ÷ Change in activity ($458,500 - $436,800) ÷ (7,000 units - 6,000 units) $21,700 ÷ 1,000 units $21.70 per unit Total variable cost = Variable cost of sales + Variable selling and administrative cost $57.90 per unit + $21.70 per unit $79.60 per unit
AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply
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