Please help solve. Also if cost of sales is a mixed cost should\'nt a fixed comp

Question

Please help solve. Also if cost of sales is a mixed cost should'nt a fixed component be calculated from it in addition to the selling and administrative costs?

Callahan corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells that the product for $115.80 per unit. Sales Volumes (units) 4,000 5,000 $338,000 S422,500 Cost of sales $89,600 s106,000. Selling & administrative costs The best estimate of the total monthly fixed cost is A.$427,600 B.$528,500 C.$24,000 D.$478,050

Explanation / Answer

Variable cost of sales = (422500-338000)/(5000-4000)= $84.5 Fixed cost of sales = 422500-(5000*84.5)= $0 Variable selling & administrative costs = (106000-89600)/(5000-4000)= $16.4 Fixed selling & administrative costs = 106000-(5000*16.4)= $24000 Option C is correct

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