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  3. abc corp. the company has fixed costs of $300,000.

ABC Corp. The company has fixed costs of $300,000. Total costs, both fixed and variable, are...

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Question

Accounting

  • ABC Corp. The company has fixed costs of $300,000. Total costs,both fixed and variable, are $378,000 when 40,000 units areproduced. How much is the variable cost per unit? (Please round tothe nearest cent.)
  • The following information pertains to the ABC Corporation:

Total Units for information given

7000

Fixed Cost per Unit

$200

Selling Price per Unit

$325

Variable Costs per Unit

$225

Target Operating Income

$100,000

  • How many units need to be sold in order to reach the targetprofit? (Round your final calculation to the nearest unit.)

Answer & Explanation Solved by verified expert
3.8 Ratings (602 Votes)

Question 1

Solution

Variable cost per unit = $1.95 per unit

Working

Total cost $    378,000.00
Less: Fixed cost $    300,000.00
Total variable cost $      78,000.00
Variable cost per unit (78000/40000) $ 1.95 per unit

Question 2

Solution

Units to be sold = 15000 units

Working

A Sale Price per unit $                 325.00
B Variable Cost per Unit $                 225.00
C=A x B Unit Contribution $                 100.00
D Total Fixed cost + desired profit $     1,500,000.00
E=D/C Units to be sold                     15,000

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