Hara Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $159.80 per unit. The best estimate of the total variable cost per unit is:

A) $77.00
B) $60.60
C) $149.10
D) $138.80

Question

Hara Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $159.80 per unit.

The best estimate of the total variable cost per unit is:

A) $77.00
B) $60.60
C) $149.10
D) $138.80

Iliyah Campbell · Accepted Answer

Final Answer : A, Explanation :  Variable cost of sales = Change in cost ÷ Change in activity= ($424,200 - $363,600)÷ (7,000 units - 6,000 units)= $60,600 ÷ 1,000 units= $60.60 per unitVariable selling and administrative cost = Change in cost ÷ Change in activity= ($547,400 - $531,000)÷ (7,000 units - 6,000 units)= $16,400 ÷ 1,000 units= $16.40 per unitTotal variable cost = Variable cost of sales + Variable selling and administrative cost= $60.60 per unit + $16.40 per unit= $77.00 per unit

Hara Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $159.80 per unit. The best estimate of the total variable cost per unit is:

A) $77.00
B) $60.60
C) $149.10
D) $138.80

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Hara Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $159.80 per unit. The best estimate of the total variable cost per unit is:A) $77.00B) $60.60C) $149.10D) $138.80

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