Direct material cost is $15,000 when 3,000 units are produced. What is the direct material cost when 1,500 units produced?
A)$3,000
B)$3,500
C)$6,000
D)$7,500

Question

Quizplus · Accepted Answer

Direct material cost is usually variable, meaning it changes in direct proportion to the number of units produced. If $15,000 is the cost for 3,000 units, then for 1,500 units (which is half of 3,000), the cost would be half of $15,000, which is $7,500.

Direct Material Cost Is $15,000 When 3,000 Units Are Produced