Question

Paige Corporation observed that when 25,000 units were sold, a particular cost amounted to $75,000, or $3.00 per unit. When volume increased by 10%, the cost totaled $82,500 (i.e., $3.00 per unit). The cost that Paige is studying can best be described as a:

Answer 1

cost that Paige is studying can best be described as variable cost

Step-by-step explanation:

given data

sold = 25,000 units

particular cost = $75,000

per unit = $3

volume increased = 10%

cost totaled = $82,500

per unit = $3

to find out

cost that Paige is studying can best be described as

solution

here we can say that cost that Paige is studying can best be described as variable cost because as cost changes with change in level of output so that this cost is termed as Variable Cost

cost change = $82,500 - $75000

cost change = $7500

so we can say that cost that Paige is studying can best be described as variable cost