At a sales volume of 42,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $596,400. To the nearest whole dollar, what should be the total sales commissions at a sales volume of 39,700 units? (Assume that this sales volume is within the relevant range.) (Round intermediate calculations to 2 decimal places.) Multiple Choice $580,070 $596,400 $563,740 $630,952

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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At a sales volume of 42,000 units, Choice Corporation's sales commissions (a cost
that is variable with respect to sales volume) total $596,400.
To the nearest whole dollar, what should be the total sales commissions at a sales
volume of 39,700 units? (Assume that this sales volume is within the relevant
range.) (Round intermediate calculations to 2 decimal places.)
Multiple Choice
$580,070
$596,400
$563,740
$630,952
Transcribed Image Text:At a sales volume of 42,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $596,400. To the nearest whole dollar, what should be the total sales commissions at a sales volume of 39,700 units? (Assume that this sales volume is within the relevant range.) (Round intermediate calculations to 2 decimal places.) Multiple Choice $580,070 $596,400 $563,740 $630,952
Expert Solution
Step 1

Solution

Variable cost is the cost which is changed in proportion to company produces. It is fixed in per unit but changed in totality.

 

Formulas-

Rate of commission = Total commission / units.

 

Commission amount = rate of commission * unit sold.

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