If 125,000 Units Are Produced, Total Costs Are $380,000

question 333

Multiple Choice

If 125,000 units are produced, total costs are $380,000. Total fixed costs for White Sails, Inc. are $180,000. The variable cost per unit is

• A) $4.48/unit.
• B) $1.60/unit.
• C) $3.04/unit.
• D) $1.44/unit.

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Definitions:

Depreciation Costs

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

Relevant Costs

All costs that vary with the consequence of a decision.

Irrelevant Costs

Costs that will not be affected by a decision and thus should not influence the decision-making process.

Touch Screen

An electronic visual display that can detect the presence and location of a touch within the display area, used for interaction.