Haras Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $141.30 per unit. The best estimate of the total variable cost per unit is:

Question

Haras Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $141.30 per unit.  The best estimate of the total variable cost per unit is:

Quizplus · Accepted Answer

Variable cost of sales = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($405,300 - $347,400)F1F1F1S1F1F1F10 (7,000 units - 6,000 units)
= $57,900 F1F1F1S1F1F1F10 1,000 units
= $57.90 per unit
Variable selling and administrative cost = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($458,500 - $436,800)F1F1F1S1F1F1F10 (7,000 units - 6,000 units)
= $21,700 F1F1F1S1F1F1F10 1,000 units
= $21.70 per unit
Total variable cost = Variable cost of sales + Variable selling and administrative cost
= $57.90 per unit + $21.70 per unit
= $79.60 per unit

Haras Corporation Is a Wholesaler That Sells a Single Product