At a sales volume of 20,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $132,000.To the nearest whole dollar, what should be the total sales commissions at a sales volume of 18,400 units? (Assume that this sales volume is within the relevant range.) (Round intermediate calculations to 2 decimal places.)

Question

Quizplus · Accepted Answer

Using the high-low method, we can find the variable cost per unit:

Variable cost per unit = (Total cost at high sales volume - Total cost at low sales volume) / (High sales volume - low sales volume)

Variable cost per unit = ($132,000 - $x) / (20,000 - 18,400)

Assuming that this variable cost per unit remains constant at all levels of sales activity, we can use it to find the total sales commissions at a sales volume of 18,400 units:

Total sales commissions at 18,400 units = Variable cost per unit x Sales volume

Total sales commissions at 18,400 units = (132,000 - x) / (20,000 - 18,400) x 18,400

Solving for x, we get:

x = $121,440

Therefore, the total sales commissions at a sales volume of 18,400 units should be $121,440. The best choice is option C.

At a Sales Volume of 20,000 Units, Choice Corporation's Sales