JB Company has fixed costs of $300 000. Total costs, both fixed and variable, are $378 000 when 40 000 units are produced. How much is the variable cost per unit? (Please round to the nearest cent.)

Question

Quizplus · Accepted Answer

To find the variable cost per unit, first calculate the total variable costs by subtracting the fixed costs from the total costs: $378,000 - $300,000 = $78,000. Then, divide the total variable costs by the number of units produced: $78,000 / 40,000 units = $1.95 per unit.

JB Company Has Fixed Costs of $300 000