Question: A company produces 1,000 units of a product at a variable cost of $5 per unit. What is the total variable cost?
Options:
$5,000
$1,000
$10,000
$500
Correct Answer: $5,000
Solution:
Total variable cost = Variable cost per unit x Number of units = $5 x 1,000 = $5,000.
A company produces 1,000 units of a product at a variable cost of $5 per unit. W
Practice Questions
Q1
A company produces 1,000 units of a product at a variable cost of $5 per unit. What is the total variable cost?
$5,000
$1,000
$10,000
$500
Questions & Step-by-Step Solutions
A company produces 1,000 units of a product at a variable cost of $5 per unit. What is the total variable cost?
Step 1: Identify the variable cost per unit, which is $5.
Step 2: Identify the number of units produced, which is 1,000.
Step 3: Use the formula for total variable cost: Total variable cost = Variable cost per unit x Number of units.
Step 4: Substitute the values into the formula: Total variable cost = $5 x 1,000.
Step 5: Calculate the total variable cost: $5 x 1,000 = $5,000.
Total Variable Cost Calculation – This concept involves calculating the total variable cost by multiplying the variable cost per unit by the total number of units produced.
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