COST ACCOUNTING
COST BEHAVIORS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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CALCULATE THE TOTAL VARIABLE COST PER ITEM:Munich Ltd also incurs £35 per treadmill for variable costs in manufacturing the treadmills. Calculate the total variable cost for the treadmills, at output levels of 1, 000 and 25, 000 units.
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£350, 000 and £87, 500
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£35, 000 and £875, 000
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Explanation:
Detailed explanation-1: -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: -The formula for total variable cost is: Total Variable Cost = (Total Quantity of Output) x (Variable Cost Per Unit of Output) Cost of materials, utilities, and commissions are all examples of variable costs.
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