Based on analyzing the production cost (Y) to units produced (X), the following relationship was found: Y=$5,000+$20X. The $20 in the equation represents: Select one: a. Variable production costs per unit. b. None of the answers given Oc. Total variable production costs. O d. Total fixed production costs

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Based on analyzing the production cost (Y) to units produced (X), the following relationship was
found: Y=$5,000+$20X. The $20 in the equation represents:
Select one:
Oa. Variable production costs per unit
Ob. None of the answers given
Oc Total variable production costs.
O d. Total fixed production costs
Oe. Fixed production costs per unit.
Next page
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Transcribed Image Text:Based on analyzing the production cost (Y) to units produced (X), the following relationship was found: Y=$5,000+$20X. The $20 in the equation represents: Select one: Oa. Variable production costs per unit Ob. None of the answers given Oc Total variable production costs. O d. Total fixed production costs Oe. Fixed production costs per unit. Next page age
Expert Solution
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The costs of production can be largely divided into two parts- Fixed cost and variable costs

Fixed costs are the costs that do not change with a change in the number of units produced.

Variable costs are cost which change with respect to the number of units produced and usually are a function of the number of units produced.

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