If the total variable costs for producing 2,000 units are $24,000, what is the v

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Question: If the total variable costs for producing 2,000 units are $24,000, what is the variable cost per unit?

Options:

Correct Answer: $10

Solution:

Variable cost per unit = Total variable costs / Number of units = $24,000 / 2,000 = $12

If the total variable costs for producing 2,000 units are $24,000, what is the variable cost per unit?

If the total variable costs for producing 2,000 units are $24,000, what is the variable cost per unit?

Step 1: Identify the total variable costs, which is given as $24,000.
Step 2: Identify the number of units produced, which is given as 2,000 units.
Step 3: Use the formula for variable cost per unit: Variable cost per unit = Total variable costs / Number of units.
Step 4: Substitute the values into the formula: Variable cost per unit = $24,000 / 2,000.
Step 5: Perform the division: $24,000 divided by 2,000 equals $12.
Step 6: Conclude that the variable cost per unit is $12.

Variable Costs – Variable costs are expenses that change in proportion to the production volume, calculated per unit by dividing total variable costs by the number of units produced.