Use the table below to answer the following question(s).
In the spreadsheet below, there is data on the price, cost, demand, and quantity produced for an item. There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $\begin{array}{|l|l|l|l|}
\hline & \text { A } & \text { B } & \text { C } \
\hline 1 & \text { Profit Model } & & \
\hline 2 & & & \\hline 3 & \text { Data } && \begin{array}{l}
\text { What-If } \text { Demand } \
\text { Values }
\end{array} \\hline 4 & & & 20,000 \
\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \
\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \
\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \
\hline 8 & \text { Demand } & 60,000 & 65,000 \
\hline 9 & \text { Quantity Produced } & 55,000 & \
\hline 10 & & & \
\hline
\end{array}$
-Calculate the variable cost when the demand is 60,000 units.
A) $1,430,000
B) $1,375,000
C) $2,750,000
D) $1,320,000

Question

Quizplus · Accepted Answer

The variable cost is calculated by multiplying the unit cost by the demand. Here, the unit cost is $25, and the demand is 60,000 units. Therefore, the variable cost is 25 * 60,000 = $1,500,000. However, since the question asks for the variable cost when the demand is 60,000 units, the correct calculation should be 25 * 55,000 = $1,375,000, as the quantity produced is 55,000 units.

Use the Table Below to Answer the Following Question(s) -Calculate the Variable Cost When the Demand Is 60,000 Units