A firm is reviewing a project with labor cost of $9.90 per unit,raw materials cost of $22.63 a unit,and fixed costs of $8,000 a month.Sales are projected at 10,000 units over the three-month life of the project.What are the total variable costs of the project?

Question

Quizplus · Accepted Answer

Total variable costs = (labor cost + raw materials cost) x number of units
Total variable costs = ($9.90 + $22.63) x 10,000 units x 3 months
Total variable costs = $32.53 x 30,000 units
Total variable costs = $975,900
Therefore, the correct answer is C) $325,300.

A Firm Is Reviewing a Project with Labor Cost of $9.90