Score: 0 of 1 pt 2 of 6 (6 complete) X ICA 11-18 (algorithmic) Use the accompany

Question

Score: 0 of 1 pt 2 of 6 (6 complete) X ICA 11-18 (algorithmic) Use the accompanying graph to answer the following questions. Assume the company makes 39,000 parts per month of Product A and 26,500 parts per month of Product B. Click the icon to view the provided graph. i (a) Which Product has the higher variable cost, and what is this value in units of dollars per part? Product A has the higher variable cost. This value is S 2.8 part mype an integer or a decimal. Round your answer to two decimal places.) Enter your answer in the answer box and then click Check Answer

Explanation / Answer

The answer is calculated as :

X - axis 5 squares = 10months

i.e 1 square = 2months

On y-axis , 5 squares = 1$ million

i.e 1 square = 0.2 $ million

Variable cost is the difference between actual cost of time period

When we observe the actual cost of product A we can find that there is highest difference between any two months as compared to that of B (observed from graph slope) :

Variable cost for product A is highest when t=70 and t = 68 difference on y-axis = 5.3 - 5.075= 0.225million $

Given 39000 parts per month

Then

Variable cost per part = 0.225 million $ /2 months/ 39000 parts

=2.8846 $ per part

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