Question

Division A of Stuart Company manufactures 5,800 units of a product per month. What is the total cost per month for producing these units if the cost per unit is $20?

A) $116,000
B) $105,800
C) $116,400
D) $100,000

Answer 1

The total cost per month for producing these units if the cost per unit is $20 is A) $116,000.

Step-by-step explanation:

To calculate the total cost per month for producing 5,800 units, you multiply the number of units by the cost per unit. In this case, 5,800 units * $20 per unit equals $116,000. Therefore, the total cost per month for producing these units is $116,000, as indicated by option A.

Understanding the basic concept of multiplying the number of units by the cost per unit is essential for cost estimation and financial planning in manufacturing scenarios. This straightforward calculation provides a clear insight into the overall financial commitment associated with a particular production volume.

Option A is correct.