Use the Table Below to Answer the Following Question(s) -Calculate the Variable Cost When the Demand Is 60,000 Units

question 49

Multiple Choice

Use the table below to answer the following question(s) .
In the spreadsheet below, there is data on the price, cost, demand, and quantity produced for an item. There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $\begin{array}{|l|l|l|l|}\hline & \text { A } & \text { B } & \text { C } \\\hline 1 & \text { Profit Model } & & \\\hline 2 & & & \\\hline 3 & \text { Data } && \begin{array}{l}\text { What-If } \text { Demand } \\\text { Values }\end{array} \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$
-Calculate the variable cost when the demand is 60,000 units.

• A) $1,430,000
• B) $1,375,000
• C) $2,750,000
• D) $1,320,000

Identify product costs that can be directly traced to the product.

Understand how expenses are categorized on a contribution margin income statement.

Apply knowledge of costing methods to evaluate special order decisions.

Understand the different types of activities (operating, investing, and financing) that affect a firm's cash position and how they are represented in financial statements.

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