Ask Question
30 January, 15:57

A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and rent $250,000/month. If the firm produces 1,000,000 units a month, the total variable costs equal

a. $125Million

b. $45Million

c. $1Million

d. $170Million

+3
Answers (1)
  1. 30 January, 16:12
    0
    The correct answer is D

    Explanation:

    The variable cost for the following is computed as:

    Total variable cost = Produced units * Labor per unit + Produced units * Materials per unit

    where

    Produced units is 1,000,000

    Labor per unit is $125 per unit

    Materials per units is $45 per unit

    Putting the values above:

    Total variable cost = 1,000,000 * $125 + 1,000,000 * $45

    Total variable cost = 125,00,000 + 45,000,000

    Total variable cost = $170,000,000 or 170 million

    Note: Rent is not the variable cost as rent is the fixed cost so will not involved above.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and rent $250,000/month. If the firm produces 1,000,000 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers