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Variable cost

Forums › FIA Forums › MA2 Managing Costs and Finance Forums › Variable cost

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  • March 9, 2018 at 1:45 pm #441763
    veronikamikh
    Member
    • Topics: 7
    • Replies: 3
    • ☆

    I cannot get a correct answer, please could you help me:

    Budgeted sales of company’s single product in a period are 20,000 units producing a total contribution of $180,000 at a selling price of $24 p.unit. Fixed cost are $6 per unit based on the budgeted sales quantity.
    What is the budgeted variable cost per unit?

    Thank you in advance

    March 9, 2018 at 6:47 pm #441876
    secondstar
    Member
    • Topics: 16
    • Replies: 220
    • ☆☆☆

    Budgeted Sales = 20,000 units
    Contribution from these units = $180,000
    Contribution/unit = $180,000/20,000 = $9

    V.C/unit = Selling Price – Contribution/unit = $24-$9 = $15

    March 10, 2018 at 12:26 pm #442050
    namah1
    Participant
    • Topics: 7
    • Replies: 72
    • ☆☆

    Contribution= sales- variable costs (marginal cost)
    180000= 480000 (24×20000)- variable cost
    480000-180000=300000/20000=15/unit

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