Question

M​ & G TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2017 operations. Sales​ (1,200 televisions) ​$1,200,000 Cost of goods sold ​540,000 Store​ manager's salary per year ​108,000 Operating costs per year ​216,000 Advertising and promotion per year ​24,000 Commissions​ (3.0% of​ sales) ​36,000 What was the variable cost per unit sold for​ 2017? A. ​$450 B. ​$770 C. ​$480 D. ​$30

Answer 1

Answer:

C. ​$480

Explanation:

Answer is C.

Cost of Goods Sold = $540,000

Commission = $36,000

Total Variable Costs = Cost of Goods Sold + Commission

Total Variable Costs = $540,000 + $36,000

Total Variable Costs = $576,000

Number of units sold = 1,200

Variable Cost per unit = Total Variable Costs / Number of units sold

Variable Cost per unit = $576,000 / 1,200

Variable Cost per unit = $480

So, Variable Cost per unit sold for 2017 is $480