Question

​Mcleod, Inc. incurred fixed costs of $ 400 comma 000. Total​ costs, both fixed and​ variable, are $ 450 comma 000 when 59 comma 000 units are produced. It sold 30 comma 000 units during the year. Calculate the variable cost per unit.​ (Round your answer to the nearest​ cent.)

Answer 1

Unitary variable cost= $1.72

Step-by-step explanation:

Giving the following information:

Mcleod, Inc. incurred fixed costs of $400,000.

Total​ costs= $450,000

Units produced= 59,000

First, we need to calculate the total variable cost:

Total variable cost= total cost - total fixed cost

Total variable cost= 450,000 - 400,000

Total variable cost= 50,000

Now, the unitary variable cost:

unitary variable cost= 50,000/29,000

unitary variable cost= $1.72