Adens Corporation\'s relevant range of activity is 2,000 units to 6,000 units. W

Question

Adens Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows:

If 5,000 units are sold, the variable cost per unit sold is closest to:

$13.00

$10.60

$12.10

$15.40

Average
Cost per Unit Direct materials $ 6.25 Direct labor $ 2.80 Variable manufacturing overhead $ 1.55 Fixed manufacturing overhead $ 2.40 Fixed selling expense $ 0.50 Fixed administrative expense $ 0.40 Sales commissions $ 1.00 Variable administrative expense $ 0.50

Explanation / Answer

Answer is $12.10

Particulars Amt Direct Material           6.25 Direct Labor           2.80 variable manufacturing overhead           1.55 Sales commissions           1.00 Variable administrative expense           0.50 Variable Cost per unit sold         12.10

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