Answer:
Target unitary variable cost= $240 per unit
Explanation:
Giving the following information:
Sales in units= 2,000
Selling price= $470
Total cost= $800,000 per year
Fixed costs= $320,000 per year.
First, we need to calculate the total variable cost:
Total variable cost= total cost - total fixed costs
Total variable cost= 800,000 - 320,000
Total variable cost= 480,000
Now, we can calculate the target unitary variable cost:
Target unitary variable cost= 480,000/2,000
Target unitary variable cost=$240 per unit
