Forever Quilting makes quilting kits priced at $120. The costs of the materials that go into each kit total $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $4,500 for the monthly salary of its owner. Forever Quilting's unit variable cost for its kits is
A) $5.
B) $45.
C) $50.
D) $120.
E) $170.

Question

Quizplus · Accepted Answer

The unit variable cost includes the costs that vary with each unit produced, which are the materials ($45) and labor ($5), totaling $50.

Forever Quilting Makes Quilting Kits Priced at $120