Sea Side Enterprises Is Trying to Predict the Cost Associated

question 158

Multiple Choice

Sea Side Enterprises is trying to predict the cost associated with producing its anchors. At a production level of 5100 anchors, Sea Side Enterprises' average cost per anchor is $53 If $17,000 of the total costs are fixed, what is the variable cost of producing each anchor?

• A)$3.33
• B)$49.67
• C)$320.75
• D)$53.00

---

Definitions:

Product Costs

The costs directly attributed to the production of a product, including materials, labor, and manufacturing overhead.

Period Costs

Expenses that are not directly attached to product production and are accounted for in the period they are incurred, such as sales and administrative expenses.

Fixed Manufacturing Cost

Costs that do not change with the level of production, such as rent, salaries, and equipment depreciation.

Manufacturing Overhead

All manufacturing costs incurred during the production process that cannot be directly attributed to specific units produced, such as utilities, maintenance, and factory supplies.