The direct material cost is $10,000 when 2,000 units are produced.What is the direct material cost for 2,500 units produced?
A)$8,000
B)$10,000
C)$12,500
D)$15,000

Question

Quizplus · Accepted Answer

The direct material cost per unit can be found by dividing the total direct material cost by the number of units produced.

Direct material cost per unit = Total direct material cost / Number of units produced

Direct material cost per unit = $10,000 / 2,000 units = $5 per unit

To find the direct material cost for 2,500 units produced:

Direct material cost = Direct material cost per unit x Number of units produced

Direct material cost = $5 per unit x 2,500 units = $12,500

Therefore, the direct material cost for 2,500 units produced is $12,500. So the answer is C.

The Direct Material Cost Is $10,000 When 2,000 Units Are