A soft drink bottler incurred the following factory utility cost: $3,636 for 650

Question

A soft drink bottler incurred the following factory utility cost: $3,636 for 650 cases bottled and $3,724 for 900 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

$5.59

$0.35

$4.14

$4.04

A soft drink bottler incurred the following factory utility cost: $3,636 for 650 cases bottled and $3,724 for 900 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

Explanation / Answer

Variable factory utility cost = Change in cost/ change in units = 3724-3636/900-650

                                                 = 88/250= $0.352

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