Question

Tayler Company reported the following data.

Price per unit = $33

Fixed cost = $5,000

Breakeven number of units = 500 units



Given these data, compute the VARIABLE COST PER UNIT.

Group of answer choices

$33 per unit

$15 per unit

$28 per unit

$42 per unit

$23 per unit

Answer 1

Variable cost per unit is $23 , if the Tayler company has price per unit is $33, fixed cost is $5000 and Break even number of units= 500 units.

Step-by-step explanation:

The given is,

Price per unit = $33

Fixed cos =$ 5000

Break even number of units = 500 units

Step:1

Total price = Price per unit × Break even number of units

= 33 × 500

= 16500

Total price = $16500

Step: 2

Total price = Fixed cost + Variable cost

16500 = 5000 + Variable cost

Variable cost = 16500 - 5000

= 11500

Variable cost = $11500

Step: 3

Variable cost per unit =
`(Variable cost)/(Number of units)`

=
`(11500)/(500)`

= 23

Variable cost per unit = $23

Result:

Variable cost per unit is $23.