The Clauson Company Has Total Fixed Costs of $400,000

question 47

Multiple Choice

The Clauson Company has total fixed costs of $400,000. They also have $120,000 in total variable costs. These costs exist at a production level of 80,000 units.
-The Clauson Company variable cost per unit is

• A) $3.50.
• B) $6.50.
• C) $5.00.
• D) $1.50.

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Definitions:

Variable Product Cost

Variable product cost includes costs that vary directly with the production volume, such as raw materials and direct labor.

Markup Percentage

The proportion added onto the purchase price of products to encompass operational costs and earnings.

Variable Product Cost

Expenses associated with the manufacturing of a product that fluctuate with the level of production output, including costs for materials and labor directly involved in production.