Question

A review of Parson Corporation's accounting records found that at a volume of 144,000 units, the variable and fixed cost per unit amounted to $6 and $2, respectively. On the basis of this information, what amount of total cost would Parson anticipate at a volume of 137,000 units?

Answer 1

$ 1, 100,000

Step-by-step explanation:

Total fixed costs=(2 x 144,000)= $288,000

Hence total cost at 137,000 units=Total fixed costs+Total variable costs

=$288,000 + (6 x 137,000)

=$1,110,000.

Answer 2

1,110,000

Step-by-step explanation:

Parson Corporation's

Volume of unit × Fixed cost per unit

144,000 unit ×2 cost per unit= 288,000

Volume of unit × Variable cost per unit

137,000 unit × 6 cost per unit = 822,000

Therefore

822,000+288,000= 1,110,000

Parson would anticipate 1,110,000 of total cost at a volume of 137,000 units.