Bowman,Inc. ,has only variable costs and fixed costs.A review of the company's records disclosed that when 200,000 units were produced,fixed manufacturing costs amounted to $800,000 and the cost per unit manufactured totaled $11.On the basis of this information,how much cost would the firm anticipate at an activity level of 205,000 units?
A)$2,235,000.
B)$2,222,000.
C)$2,214,000.
D)$2,200,000.
E)Some other amount not listed abovE.

Question

Quizplus · Accepted Answer

Fixed costs are $800,000. Variable costs are $11 per unit. At 205,000 units, variable costs will be $2,245,000 (205,000 x $11). Total costs will be $3,045,000 ($800,000 + $2,245,000).