In the part circled the question doesn’t tell me why I have to multiply the unit

Question

In the part circled the question doesn’t tell me why I have to multiply the units by the price of 2.6. How do I figure that out? T-Mobile 96% Total costs $ 82.004S b. Calculate the cost formula for mixed cost using the high-low method. (Do not round intermediate caliculations. Round "Variable cost to 2 decimal places. G. Calculate the total cost that would be incurred for the production of 13,425 units. (Do not round intermediate calculations) d. Idenbify the two key cost behavior assumptions made in the calculation of your answer to part c $18,720) = $48,672 Variable oosts ($27,040 / 10,400 urit" $2.6 per unit-($2.6 per unit Mixed cost = (Total costs-(Variable + Fixed)) 117,447-(548,67233.200))$35,575 Total mixed cost (Fixed cost Variable cost) Variable cost-(Variable rate × Vlume) Variable rate = (high $-LOW $) / (Hgh units-Low units) ($35,575-$21,764)(18,720-10,400) = $13,811/8,320 $1.66 per unt At 10.400 units: Variable cost (51.66 x 10.400 units)-$17.264 Total mixed cost = Fixed oost + Variable cost $21.764 Fixed+$17.264 Fixed $4,500 At 18,720 units: Variable cost " ($1.6618,720 units)-$31,075 Total mixed costFxed cost Variable cost $35,575 Fixed+$31,075 Fixed $4,500 cost formula Food cost + (Variable rate x Volume $4,500 + $1.66 per unit Variable (13,425 units $2.6 34.905 33.200 At 13.425 Mixed ($4 500+(13,425 units $1.66 per unit)) Total cos $94.890 d. Cost behavior pattem is linear. Relevant range does not change

Explanation / Answer

Under point c, we have to calculate the cost incurred for the production of 13425 units.

So, to calculation the total variable costs incurred on 13425 units, we have to multiply the units 13425 by the per unit cost of $2.6.

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Units Per unit cost $ Calculation Total Costs $ 13425 Variable ($2.60 per unit) 13425 * 2.60= 34905 Fixed 33200 Mixed ($4500 + $1.66 per unit) $4500 + (13425 * $1.66) = 26786 Total Costs = $94890

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