Principles of Managerial Accounting Web Summer 2018 Test: Exam 4/Final Exam This

Question

Principles of Managerial Accounting Web Summer 2018 Test: Exam 4/Final Exam This Question: 1 pt Justin Gladden & 7/27/18 10:43 AM Time Remaining: 01:40:11 Submit Test This Test: 35 pts possible 13 of 35 (4 complete) ea Side Enterprises is trying to predict the cost associated with producing its anchors. At a production level of 5,200 anchors, Sea Side Ent average cost per anchor is $52. H $19,000 of the costs are fixed, and the plant manager uses the cost equation to pre 10,000 anchors will be (Round any intermediary calculations to the nearest cent.) O A. $52.000 O B. $520,000 O C. $502,.500 O D. $270,400

Explanation / Answer

Answer: C. $ 502,500.

Variable cost per unit = [ 5,200 x $ 52 - $ 19,000 ] / 5,200 = $ 48.346.

Total cost at an output level of 10,000 units = 10,000 x $ 48.346 + $ 19,000 = $ 502,460.

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