Pedregon Corporation has provided the following information: If 4,000 units are sold, the variable cost per unit sold is closest to:
A) $16.55
B) $11.60
C) $12.65
D) $14.60

Question

Pedregon Corporation has provided the following information:  If 4,000 units are sold, the variable cost per unit sold is closest to:
A) $16.55 
B) $11.60 
C) $12.65 
D) $14.60

Quizplus · Accepted Answer

Using the given information, we can calculate the contribution margin per unit as follows:
Contribution margin per unit = selling price per unit - variable cost per unit
Contribution margin per unit = $43.50 - $22.85 - $4.50
Contribution margin per unit = $16.15
Since Pedregon Corporation wants to know the variable cost per unit sold, we can rearrange the above formula to solve for it:
Variable cost per unit = selling price per unit - contribution margin per unit
Variable cost per unit = $43.50 - $16.15
Variable cost per unit = $27.35 / unit
Therefore, if 4,000 units are sold, the variable cost per unit sold is approximately $12.65. 
Hence, the best choice is C.

Pedregon Corporation Has Provided the Following Information: If 4,000