COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is the total variable cost of producing 10, 000 booklets if the selling price is £5, the variable cost per booklet is £2 and fixed costs are £30, 000?
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£30, 000
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£20, 000
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£15, 000
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£10, 000
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Explanation:
Detailed explanation-1: -When 10, 000 units are produced, variable costs are $6 per unit.
Detailed explanation-2: -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-3: -The formula for total variable cost is: Total Variable Cost = (Total Quantity of Output) x (Variable Cost Per Unit of Output)
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