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Calico Joe Fabrics Sells a Single Product How Would You Best Describe Calico's Variable Cost Per Unit

Question 44

Multiple Choice

Calico Joe Fabrics sells a single product. The company estimates total fixed costs at $360,000 with demand and unit variable costs at various activity levels as follows:
 Units Demanded  Unit Price  Total Variable Costs 7,000$31$1,606,00083,000301,826,00093,000292,046,000103,000282,266,000113,000272,486,000\begin{array} {| c | c | c | } \hline \text { Units Demanded } & \text { Unit Price } & \text { Total Variable Costs } \\\hline 7,000 & \$ 31 & \$ 1,606,000 \\83,000 & 30 & 1,826,000 \\93,000 & 29 & 2,046,000 \\103,000 & 28 & 2,266,000 \\113,000 & 27 & 2,486,000\\\hline\end{array}
How would you best describe Calico's variable cost per unit over the range shown?


A) It is constant.
B) It is increasing as volume increases.
C) It is decreasing as volume increases.
D) There is not enough information provided to determine the answer.

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