JB Company has fixed costs of $300 000. Total costs, both fixed and variable, are $378 000 when 40 000 units are produced. If the volume increases to 50 000 units, what will the total costs be?

Question

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Explanation:Variable cost per unit = (Total cost - Fixed cost) / Units produced= (378,000 - 300,000) / 40,000= 19.5Total cost when 50,000 units are produced= Fixed cost + (Variable cost per unit * Units produced)= 300,000 + (19.5 * 50,000)= $397,500

JB Company Has Fixed Costs of $300 000