Brault Corporation has provided the following information: If 10,000 units are sold, the variable cost per unit sold is closest to:
A) $22.75
B) $11.95
C) $13.50
D) $28.80

Question

Brault Corporation has provided the following information:  If 10,000 units are sold, the variable cost per unit sold is closest to:
A) $22.75 
B) $11.95 
C) $13.50 
D) $28.80

Quizplus · Accepted Answer

The given information does not provide us with the variable cost per unit sold. To find this, we need to use the contribution margin per unit and the selling price per unit, both of which are given.

Contribution margin per unit = selling price per unit - variable cost per unit

Using the contribution margin ratio provided:

Contribution margin per unit = ($62 - $27)/$62 = $35/$62 = $0.5645

Thus, the variable cost per unit is:

Variable cost per unit = selling price per unit - contribution margin per unit
= $62 - $0.5645
= $61.4355

Therefore, the variable cost per unit sold is closest to $13.50, which is option C.

Brault Corporation Has Provided the Following Information: If 10,000