Total fixed costs for Yellow Boats Inc. are $100,000. Total costs, both fixed and variable, are $500,000 if 125,000 units are produced. The total variable costs at a level of 200,000 units would be

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The total variable costs can be calculated by first determining the variable cost per unit at the production level of 125,000 units. The total costs at this level are $500,000, which includes both fixed ($100,000) and variable costs. Subtracting the fixed costs from the total costs gives the total variable costs at this production level: $500,000 - $100,000 = $400,000. The variable cost per unit is then $400,000 / 125,000 = $3.20 per unit. At a production level of 200,000 units, the total variable costs would be 200,000 units * $3.20 per unit = $640,000.

Total Fixed Costs for Yellow Boats Inc