Buildz Manufacturing currently produces 2,000 tables per month. The following per unit data for 2,000 tables apply for sales to regular customers:

The plant has capacity for 4,000 tables and is considering expanding production to 4,000 tables. What is the total cost of producing 4,000 tables?
A) $540,000
B) $500,000
C) $390,000
D) $620,000

Question

Buildz Manufacturing currently produces 2,000 tables per month. The following per unit data for 2,000 tables apply for sales to regular customers:

The plant has capacity for 4,000 tables and is considering expanding production to 4,000 tables. What is the total cost of producing 4,000 tables?
A) $540,000 
B) $500,000 
C) $390,000 
D) $620,000

Quizplus · Accepted Answer

[($75 + $20 + $20) × 4,000 units] + ($40 × 2,000 units) = $540,000

Buildz Manufacturing Currently Produces 2,000 Tables Per Month