Question

McLeod, Inc. incurred fixed costs of $300,000 and variable costs of $200,000 for total costs of $500,000 when 59,000 units are produced. It sold 35,000 units during the year. Calculate the variable cost per unit. (Round your answer to the nearest cent.)

Answer 1

$3.389

Step-by-step explanation:

Data provided as per the question below

Fixed cost = $300,000

Variable cost = $200,000

Total cost = $500,000

Units produced = 59,000

The computation of variable cost per unit is shown below:-

Variable cost per unit = Variable cost ÷ Units produced

= $200,000 ÷ 59,000

= $3.389

Therefore we applied the above formula.