Table 13-7
Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month.

-Refer to Table 13-7.What is the average variable cost for the month if six instructional modules are produced?

Question

Table 13-7
Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month.
 
-Refer to Table 13-7.What is the average variable cost for the month if six instructional modules are produced?

Quizplus · Accepted Answer

To calculate the average variable cost, we need to add up all the variable costs and divide by the number of instructional modules produced. Looking at Table 13-7, we can see that the variable costs for producing six instructional modules are:

Materials: $150.00
Direct labor: $360.00
Shipping and handling: $23.33

Adding these up, we get $533.33. Dividing by 6, we get an average variable cost of $88.89 per instructional module. Therefore, the best choice is B.

Table 13-7 Teacher's Helper Is a Small Company That Has a Subcontract