Smith Corporation has variable costs equal to $5.10 per unit, fixed costs of $11,000, and total output equal to 240 units. What is the total cost?
Question
Smith Corporation has variable costs equal to 11,000, and total output equal to 240 units. What is the total cost?
Solution
To calculate the total cost, we need to add the fixed costs to the variable costs multiplied by the total output.
Step 1: Calculate the total variable costs Variable costs per unit = 5.10 * 240 = $1,224
Step 2: Add the fixed costs to the total variable costs Fixed costs = 11,000 + 12,224
So, the total cost for Smith Corporation is $12,224.
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