In a factory,the total variable costs are $600 if 500 units are produced.If 400 units are produced,the total variable costs would be

Question

Quizplus · Accepted Answer

We can use the formula:

Total variable cost = Variable cost per unit x Number of units

We can rearrange the formula to solve for the variable cost per unit:

Variable cost per unit = Total variable cost / Number of units

Using the first scenario where 500 units are produced:

Variable cost per unit = $600 / 500 units
Variable cost per unit = $1.2 per unit

Using this unit cost, we can calculate the total variable cost for producing 400 units:

Total variable cost = Variable cost per unit x Number of units
Total variable cost = $1.2 per unit x 400 units
Total variable cost = $480

Therefore, the total variable costs for producing 400 units would be $480 (choice A).

In a Factory,the Total Variable Costs Are $600 If 500