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28 March, 07:25

Total fixed costs for Taylor Incorporated are $ 240 comma 000. Total costs, including both fixed and variable, are $ 400 comma 000 if 171 comma 000 units are produced. The variable cost per unit is A. $ 3.74 /unit. B. $ 1.40 /unit. C. $ 0.94 /unit. D. $ 2.34 /unit.

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  1. 28 March, 08:50
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    Option (c) is correct.

    Explanation:

    Given that,

    Total fixed costs = $240,000

    At the production volume of 171,000 units,

    Total cost = $400,000

    Total variable cost = Total cost - Total fixed costs

    = $400,000 - $240,000

    = $160,000

    Variable cost per unit:

    = Total variable cost : Number of units produced

    = $160,000 : 171,000 units

    = $0.935 per unit or $0.94 per unit
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