Doggie Pals produces 100,000 dog collars each month that give off a fresh scent to keep your dog smelling clean between baths.Total manufacturing costs are $200,000.Of this amount,$150,000 are variable costs.What are the total production costs when 125,000 collars are produced? (Assume both production levels are in the same relevant range. )

Question

Quizplus · Accepted Answer

C)
v = $150,000/ 100,000
v = $1.50
then
f = $200,000 - 150,000
f = $50,000
finally
y = vx + f
y = $1.50 (125,000)+ $50,000
y = $237,500

Doggie Pals Produces 100,000 Dog Collars Each Month That Give