Asked by Alexsis Oltsher on Jun 04, 2024

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What would be the total variable cost at an activity level of 5,200 units? Assume that this level of activity is within the relevant range.

A) $137,020
B) $131,750
C) $162,950
D) $32,448

Variable Cost

Variable costs change in proportion to the level of business activity or production volume, such as raw materials and packaging.

Activity Level

Refers to the volume of production or operations within a specific period, influencing costs and operational capacity.

Units

The individual items or products counted for inventory, production, or sales purposes.

  • Determine the overall and each unit's cost at varying production scales.
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Verified Answer

ZK
Zybrea KnightJun 07, 2024
Final Answer :
A
Explanation :
Variable cost per unit = Total variable cost ÷ Total activity
= $131,750 ÷ 5,000 units
= $26.35 per unit
Total variable cost = Variable cost per unit × Total activity
= $26.35 per unit × 5,200 units
= $137,020