Asked by Mozes Leveille on May 28, 2024
Verified
Lagle Corporation has provided the following information: 
If 5,000 units are sold, the total variable cost is closest to:
A) $47,750
B) $73,000
C) $57,500
D) $57,750
Variable Cost
Variable expenses that are closely aligned with the level of production or the volume of sales, for example, raw materials and direct labor.
Total Variable Cost
The total of all expenses that fluctuate based on the amount of goods produced or sold, including raw materials and wages for workers directly involved in production.
Units Sold
The total quantity of a company's product that has been purchased by customers during a specific period.
- Internalize the concept of variable costs and their fluctuation in accordance with production rates.
Verified Answer
ZK
Zybrea KnightJun 02, 2024
Final Answer :
C
Explanation :
We have the following information:
Total fixed cost = $140,000
Variable cost per unit = $8.50
Selling price per unit = $19
To calculate the total variable cost, we need to multiply the variable cost per unit by the number of units sold:
Total variable cost = Variable cost per unit x Number of units sold
Total variable cost = $8.50 x 5,000
Total variable cost = $42,500
Therefore, the closest answer is C) $57,500.
Total fixed cost = $140,000
Variable cost per unit = $8.50
Selling price per unit = $19
To calculate the total variable cost, we need to multiply the variable cost per unit by the number of units sold:
Total variable cost = Variable cost per unit x Number of units sold
Total variable cost = $8.50 x 5,000
Total variable cost = $42,500
Therefore, the closest answer is C) $57,500.
Learning Objectives
- Internalize the concept of variable costs and their fluctuation in accordance with production rates.