Taylor and Ashcroft Is Reviewing a New Product with Labour

Multiple Choice

Taylor and Ashcroft is reviewing a new product with labour cost of $16.40 per unit, raw materials cost of $41.65 a unit, and fixed costs of $164,000 a year. Sales are projected at 85,000 units per year over the 3-year life of the product. What is the amount of the total variable costs per year?

A) $3,540,250
B) $3,780,500
C) $4,221,500
D) $4,770,250
E) $4,934,250