Question

Carter co. sells two products, arks and bins. last year, carter sold 14,000 units of arks and 56,000 units of bins. related data are: product unit selling price unit variable cost unit contribution margin arks $120 $80 $40 bins 80 60 20 what was carter co.'s variable cost of e, with e representing one overall "enterprise" product?

a. $64

b. $140

c. $70

d. $60

Answer 1

To answer this question, the only important values are:

Bin

Units sold = 14,000

Variable cost = $80

Arks

Units sold = 56,000

Variable cost = $60

Calculating for total variable cost:

Total variable cost = $80 * 14,000 + $60 * 56,000

Total variable cost = $4,480,000

Calculating for e:

e = Total variable cost / Total units sold

e = $4,480,000/(14,000+56,000)

e = $64

Answer is letter A.