A company has the following costs at three activity levels.
Activity 60000 72000
Total cost 960000 1104000
The fixed cost is constant over this range of activity, but there is a reduction in the variable cost per unit by 10% when the activity level exceeds 15,000 units. This reduction applies to all units.
What is the expected total cost when the activity level is 14,000 units?
A $131,800
B $132,400
C $136,000
D $138,000
correct answer is D
can some plz explain?
Activity 60000 72000
Total cost 960000 1104000
The fixed cost is constant over this range of activity, but there is a reduction in the variable cost per unit by 10% when the activity level exceeds 15,000 units. This reduction applies to all units.
What is the expected total cost when the activity level is 14,000 units?
A $131,800
B $132,400
C $136,000
D $138,000
correct answer is D
can some plz explain?
