Assume that Charlie's Brownies expects to produce and sell 5,000 units of a single product, a gift box containing an assortment of brownies that showcases the company's many flavors.The following additional company information is available: $\begin{array}{lr}
\text { Variable costs (per unit) } \
\text {Production costs } &\$ 30 \
\text { Nonproduction costs } &\$ 2 \
\text { Fixed costs (in total) } \
\text {Overhead } &\$ 100,000 \
\text { Nonproduction } &\$ 5,000
\end{array}$ Compute Charlie's Brownies total cost per unit.
A)$32
B)$50
C)$53
D)$3
E)$21

Question

Assume that Charlie's Brownies expects to produce and sell 5,000 units of a single product, a gift box containing an assortment of brownies that showcases the company's many flavors.The following additional company information is available: $\begin{array}{lr}
 \text { Variable costs (per unit) } \
 \text {Production costs  } &\$ 30 \
 \text { Nonproduction costs } &\$ 2 \
 \text { Fixed costs (in total) } \
 \text {Overhead  } &\$ 100,000 \
 \text { Nonproduction } &\$ 5,000
\end{array}$ Compute Charlie's Brownies total cost per unit.
A)$32
B)$50
C)$53
D)$3
E)$21

Quizplus · Accepted Answer

The total cost per unit includes both variable and fixed costs. Variable costs per unit are $32 ($30 production + $2 nonproduction). Fixed costs per unit are $21 (($100,000 + $5,000) / 5,000 units). Therefore, the total cost per unit is $53 ($32 + $21).

Assume That Charlie's Brownies Expects to Produce and Sell 5,000