Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: What was Carter Co.'s weighted average variable cost?

Question

Quizplus · Accepted Answer

We do not have specific cost data to calculate variable costs for each product separately. Therefore, we can only use the weighted average of the total variable costs for both products. Let's assume that the total variable costs incurred by the company on the sale of 70,000 units (14,000 Arks and 56,000 Bins) are $4,480,000.
Weighted average variable cost = Total variable costs / Total units sold
= $4,480,000 / 70,000 units
= $64 per unit
Therefore, the answer is (C) $64.

Carter Co Sells Two Products, Arks and Bins