ABC Corp. The company has fixed costs of $300,000. Total costs,
both fixed and variable, are...
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Accounting
ABC Corp. The company has fixed costs of $300,000. Total costs,both fixed and variable, are $378,000 when 40,000 units areproduced. How much is the variable cost per unit? (Please round tothe nearest cent.)
The following information pertains to the ABC Corporation:
Total Units for information given
7000
Fixed Cost per Unit
$200
Selling Price per Unit
$325
Variable Costs per Unit
$225
Target Operating Income
$100,000
How many units need to be sold in order to reach the targetprofit? (Round your final calculation to the nearest unit.)
Answer & Explanation
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3.8 Ratings (602 Votes)
Question 1
Solution
Variable cost per unit = $1.95 per unit
Working
Total cost
$ 378,000.00
Less:
Fixed cost
$ 300,000.00
Total
variable cost
$ 78,000.00
Variable
cost per unit (78000/40000)
$ 1.95
per unit
Question 2
Solution
Units to be sold = 15000 units
Working
A
Sale Price per unit
$
325.00
B
Variable
Cost per Unit
$
225.00
C=A x
B
Unit
Contribution
$
100.00
D
Total
Fixed cost + desired profit
$ 1,500,000.00
E=D/C
Units to
be sold
15,000
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