Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

The data below relate to a product. The budgeted selling price for each unit is $\$250$. The break-even quantity comes to $800$ units. The contribution to sales ratio equals $60\%$. What are the values of both fixed and variable costs?

  • Atotal fixed costs $\$80\,000$, variable costs per unit $\$100$
  • Btotal fixed costs $\$80\,000$, variable costs per unit $\$150$
  • Ctotal fixed costs $\$120\,000$, variable costs per unit $\$100$
  • Dtotal fixed costs $\$120\,000$, variable costs per unit $\$150$

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