Aries,a small-appliance manufacturer,produces a line of mixer-grinders and expects to sell 60,000 units in the coming period.A fixed cost of $600,000 is associated with producing the mixer-grinders,and variable cost is $20 per unit.The unit cost for each mixer-grinder would be _____.

Question

Quizplus · Accepted Answer

To find the unit cost for each mixer-grinder, we need to add the fixed cost and the variable cost per unit.
Variable cost per unit = $20
Fixed cost = $600,000
Total cost = Variable cost per unit x Number of units + Fixed cost
Total cost = $20 x 60,000 + $600,000
Total cost = $1,800,000
Unit cost = Total cost / Number of units
Unit cost = $1,800,000 / 60,000
Unit cost = $30
Therefore, the unit cost for each mixer-grinder would be $30. Option B is the best choice.

Aries,a Small-Appliance Manufacturer,produces a Line of Mixer-Grinders and Expects to Sell