Chocolate Manufacturing is considering producing a new product.Chocolate Manufacturing expects to sell 15,000 units over the life of the product.Variable production costs and variable selling costs are estimated at $42 and $16 per unit, respectively.Annual fixed production and fixed selling costs are estimated at $15,000 and $5,000, respectively.Research and development costs are estimated at $184,000.___________ is the total variable cost over the product life cycle.
A)$204,000
B)$716,000
C)$870,000
D)$880,000

Question

Quizplus · Accepted Answer

Total variable cost over the product life cycle can be calculated as:
Variable cost per unit * Number of units sold
= ($42 + $16) * 15,000
= $870,000

Therefore, the answer is choice C.

Chocolate Manufacturing Is Considering Producing a New Product