11. H&H Bagels sells bagels in packages of six bagels. In April 2020, H&H sold 15,000 packages with a unit price of $8.80 each. H&H had $45,895 of fixed costs and calculated its breakeven volume at 6,850 packages for the month of April. What were H&H's variable costs per unit and how much did H&H incur in total variable costs in April? A. $2.10 and $31,500 B. $6.70 and $100,500 C. $2.10 and $14,385 D. $6.70 and $45,895

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
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Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EA: Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of...
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11. H&H Bagels sells bagels in packages of six bagels. In April 2020, H&H sold 15,000 packages with a
unit price of $8.80 each. H&H had $45,895 of fixed costs and calculated its breakeven volume at 6,850
packages for the month of April. What were H&H's variable costs per unit and how much did H&H incur
in total variable costs in April?
A. $2.10 and $31,500
B. $6.70 and $100,500
C. $2.10 and $14,385
D. $6.70 and $45,895
Transcribed Image Text:11. H&H Bagels sells bagels in packages of six bagels. In April 2020, H&H sold 15,000 packages with a unit price of $8.80 each. H&H had $45,895 of fixed costs and calculated its breakeven volume at 6,850 packages for the month of April. What were H&H's variable costs per unit and how much did H&H incur in total variable costs in April? A. $2.10 and $31,500 B. $6.70 and $100,500 C. $2.10 and $14,385 D. $6.70 and $45,895
Expert Solution
Step 1

The correct option is option “A”.

 

Total Sales = 15000*8.80 = $132,000

Fixed Costs = $45,895

Break Even Sales ( Units) = Total fixed costs/ Contribution margin per unit

6850 = 45,895 / contribution margin per unit

Contribution margin per unit = $6.70

 

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