BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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8, 333
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31, 167
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39, 369
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40, 000
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Detailed explanation-1: -Variable Cost Formula. To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.
Detailed explanation-2: -An increase in fixed cost will increase the break-even units as an increase in the numerator will increase the ratio. The break-even point is calculated as fixed cost divided by contribution per unit, so as the fixed cost increases the units required to cover the fixed cost will also increase.
Detailed explanation-3: -The contribution margin on each unit is calculated as sales per unit less variable cost per unit. Hence, when the variable cost per unit increases the contribution margin per unit decrease. Example: The company ABC Ltd produces wheelsets, variable cost per unit is $8, the sale price per unit is $15.