Question

When Sherka, Inc. sells 40,000 units, its total variable cost is $96,000. What is its total variable cost when it sells 45,000 units?

A. $84,000
B. $96,000
C. $108,000
D. It cannot be determined from the information given.

Answer 1

The correct answer is D.

Step-by-step explanation:

Giving the following information:

When Sherka, Inc. sells 40,000 units, its total variable cost is $96,000.

Unitary variable cost= 96,000/40,000= $2.4

What is its total variable cost when it sells 45,000 units?

Variable cost= 45,000*2.4= $108,000