Question

At a volume of 200,000 units, carson co. incurred total fixed costs of $400,000 and total...

At a volume of 200,000 units, carson co. incurred total fixed costs of $400,000 and total variable costs of $100,000. Based on this information, what total cost would be incurred at a volume of 250,000 units? $625,000, $600,000, $500,000, or $525,000

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Answer #1
Ans. Option 4th   $525000
*Calculation:
Variable cost 125000
Fixed cost 400000
Total cost 525000
*Calculation of variable cost:
Variable cost = Variable cost per unit * units
0.5 * 250000
125000
*Variable cost per unit = total variable cost / volume of given units
100000 / 200000
0.5
*Fixed costs do not change by the change of volume.
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