Question

In 2021 the business manufactured and sold 98,000 units

and had fixed costs of £132,670. All other costs were
variable.
a.Calculate the selling price and variable cost per unit
for 2021.

Answer 1

To calculate the selling price per unit, divide the total revenue by the number of units sold. To calculate the variable cost per unit, rearrange the equation to solve for it.

Step-by-step explanation:

To calculate the selling price per unit, we need to divide the total revenue by the number of units sold. Total revenue is calculated by multiplying the selling price by the number of units sold. In this case, let's assume the total revenue is equal to the total variable costs plus the fixed costs. We can set up an equation as follows: Total revenue = (Selling price per unit * 98,000 units) = Variable cost per unit * 98,000 units + £132,670.

We can rearrange the equation to solve for the selling price per unit:

Selling price per unit = (Variable cost per unit * 98,000 units + £132,670) / 98,000 units.

To calculate the variable cost per unit, we can rearrange the equation to solve for it:

Variable cost per unit = (Selling price per unit * 98,000 units + £132,670) / 98,000 units.