At a sales volume of 32,000 units, CD Company's total fixed costs are $64,000 and total variable costs are $60,000. The relevant range is 30,000 to 55,000 units.

-If CD Company sells 50,000 units,what is the total expected cost per unit? (Do not round intermediate computations).Round final answer to the nearest cent.
A) $3.20.
B) $2.48.
C) $3.88.
D) $3.16.

Question

At a sales volume of 32,000 units, CD Company's total fixed costs are $64,000 and total variable costs are $60,000. The relevant range is 30,000 to 55,000 units.

-If CD Company sells 50,000 units,what is the total expected cost per unit? (Do not round intermediate computations).Round final answer to the nearest cent.
A) $3.20.
B) $2.48.
C) $3.88.
D) $3.16.

Quizplus · Accepted Answer

To calculate the total expected cost per unit at a sales volume of 50,000 units, we first need to understand the components of total cost, which include fixed costs and variable costs. Fixed costs remain constant regardless of the number of units produced, while variable costs change with the level of production.Given:- Fixed Costs = $64,000- Variable Costs at 32,000 units = $60,000- Sales Volume for calculation = 50,000 unitsFirst, calculate the variable cost per unit at the given level of 32,000 units:Variable Cost per Unit = Total Variable Costs / Number of Units = $60,000 / 32,000 = $1.875 per unitSince variable costs change with production, we calculate the total variable costs at 50,000 units:Total Variable Costs at 50,000 units = Variable Cost per Unit * Number of Units = $1.875 * 50,000 = $93,750Next, add the fixed costs (which do not change with the level of production) to find the total costs:Total Costs at 50,000 units = Fixed Costs + Total Variable Costs = $64,000 + $93,750 = $157,750Finally, calculate the cost per unit at 50,000 units:Cost per Unit = Total Costs / Number of Units = $157,750 / 50,000 = $3.155Rounded to the nearest cent, the total expected cost per unit is $3.16.

At a Sales Volume of 32,000 Units, CD Company's Total