Asked by Jocelyn Espericueta on May 02, 2024
Verified
Brault Corporation has provided the following information: 
If 10,000 units are sold, the variable cost per unit sold is closest to:
A) $22.75
B) $11.95
C) $13.50
D) $28.80
Variable Cost
Costs that change in proportion to the level of goods or services produced, such as materials and direct labor.
Units Sold
The total quantity of products that a company sells during a specific period.
- Master and implement cost formulas for predicting expenditures for multiple production capacities.
- Assess the repercussions of production volume adjustments on per-unit fixed and variable costs.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
C
Explanation :
The given information does not provide us with the variable cost per unit sold. To find this, we need to use the contribution margin per unit and the selling price per unit, both of which are given.
Contribution margin per unit = selling price per unit - variable cost per unit
Using the contribution margin ratio provided:
Contribution margin per unit = ($62 - $27)/$62 = $35/$62 = $0.5645
Thus, the variable cost per unit is:
Variable cost per unit = selling price per unit - contribution margin per unit
= $62 - $0.5645
= $61.4355
Therefore, the variable cost per unit sold is closest to $13.50, which is option C.
Contribution margin per unit = selling price per unit - variable cost per unit
Using the contribution margin ratio provided:
Contribution margin per unit = ($62 - $27)/$62 = $35/$62 = $0.5645
Thus, the variable cost per unit is:
Variable cost per unit = selling price per unit - contribution margin per unit
= $62 - $0.5645
= $61.4355
Therefore, the variable cost per unit sold is closest to $13.50, which is option C.
Learning Objectives
- Master and implement cost formulas for predicting expenditures for multiple production capacities.
- Assess the repercussions of production volume adjustments on per-unit fixed and variable costs.