Variable Costs Per Unit Are as Follows

question 48

Multiple Choice

Variable costs per unit are as follows:
Raw materials $2.15
Direct labor $1.45
Fixed costs are $5,000 per month
If the company produces 4,000 units in the month of March their total costs will be:

• A)$14,400
• B)$19,400
• C)$13,600
• D)$18,000

---

Definitions:

Underground Deposits

Natural accumulations of minerals, oil, gas, or water located beneath the earth's surface which can be extracted for use or sale.

Depletion Expense

An accounting and tax concept used to allocate the cost of extracting natural resources from the Earth over the period of extraction.

Extracted

Removed or taken out, often referring to the process of obtaining specific data or substances from a larger set or material.

Sold

Refers to the completion of a transaction where goods or services are exchanged for payment.