Sally Is Compiling Some Numbers for the Factory Where She

Multiple Choice

Sally is compiling some numbers for the factory where she works. This factory has many business units, and some sell to external customers only, some sell internally only, and some sell to both internal and external customers. She is specifically looking at Business Unit A which sells primarily to external customers but will also sell to other internal business units. Business Unit A currently has no idle capacity, $2.97 per unit of opportunity cost, and $189,650 in fixed costs. Determine the overall variable cost if business unit A had sales of 75,000 units for a total of $322,500.

A) $33,100
B) $99,750
C) $222,750
D) $322,500