1 answer

Question 2 10 pts An apparel manufacturing plant has estimated the variable cost to be $3.40...

Question:

Question 2 10 pts An apparel manufacturing plant has estimated the variable cost to be $3.40 per unit. Fixed costs are $700,0

Question 2 10 pts An apparel manufacturing plant has estimated the variable cost to be $3.40 per unit. Fixed costs are $700,000 per year. Forty percent of its business is with one preferred customer and the customer is charged at cost. The remaining 60% of the business is with several different customers who are charged $35 per unit. If 150,000 total units are sold in a year, compute the unit cost per item. O $21.53 O $2.97 0 $4.67 O $8.07

Answers

Correct answer---------$8.07

Working

Variable cost (3.40 x 150000) $    5,10,000.00
Fixed cost $    7,00,000.00
Total cost $ 12,10,000.00
Divided by Units   150000
Cost per unit $ 8.07

Fixed cost remains same in totality.

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