Anthony Chemicals Inc.has fixed costs of $30,000 per month.Highest production volume during the year was in January when 100,000 units were produced,75,000 units were sold,and total costs of $630,000 were incurred.In June,the company produced only 55,000 units.What was the total cost incurred in June?

Question

Quizplus · Accepted Answer

The total costs in January were $630,000. We can use this information to find the variable cost per unit:

Variable cost per unit = (Total cost - Fixed cost) / Number of units produced
Variable cost per unit = ($630,000 - $30,000) / 100,000
Variable cost per unit = $6

Using this variable cost per unit, we can find the total cost incurred in June:

Total cost in June = Fixed cost + (Variable cost per unit x Number of units produced)
Total cost in June = $30,000 + ($6 x 55,000)
Total cost in June = $360,000

Therefore, the answer is B.