When 5,000 Units Are Produced Variable Costs Are $35 Per

question 39

Multiple Choice

When 5,000 units are produced variable costs are $35 per unit and total costs are $200,000.What are the total costs when 8,000 units are produced?

• A)$200,000.
• B)$305,000.
• C)$240,000.
• D)Some other amount.
• E)Total costs cannot be calculated based on the information presented.

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life.

Net Income After Taxes

The profit a company retains after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total revenue.

Operating Costs

Operating costs are expenses associated with the maintenance and administration of a business on a day-to-day basis.

Depreciation Expense

The allocated portion of the cost of a fixed asset, written off each year over the asset's useful life for accounting and tax purposes.