could you help me only slove (d),thanks Mateo Company's average cost per unit is $1.425 at the 16,000-unit level of activity and $1.38 at the 20,000-unit level of activity. The selling price is $3.00 per unit.Assume that all of the activity levels mentioned in this problem are within the relevant range.Required:Predict the following items for Mateo Company:(a) Variable cost per unit.(b) Total fixed cost per period.(c) Total expected costs at the 18,000-unit level of activity.(d) Total Contribution Margin at the 18,000 unit level of production and sales.

Variable cost per unit: $1.20 per unit Working: Particulars Cost Units High level of…

Answered: ld you help me only slove (d),thanks

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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could you help me only slove (d),thanks

Mateo Company's average cost per unit is $1.425 at the 16,000-unit level of activity and $1.38 at the 20,000-unit level of activity. The selling price is $3.00 per unit.

Assume that all of the activity levels mentioned in this problem are within the relevant range.

Required:

Predict the following items for Mateo Company:

(a) Variable cost per unit.
(b) Total fixed cost per period.
(c) Total expected costs at the 18,000-unit level of activity.
(d) Total Contribution Margin at the 18,000 unit level of production and sales.

Expert Solution

Step 1:-Calculation of variable cost per unit

Variable cost per unit: $1.20 per unit

Working:

Particulars	Cost	Units
High level of activity (20,000 units $1.38)*	27,600	20,000
Low level of activity (16,000 units $1.425)*	22,800	16,000
Change	4,800	4,000

Variable cost per unit=Change in cost \ Change in units

=$4800 / 4000 units

= $1.20

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