Answer:
$20,000
Step-by-step explanation:
It is given that a company sell 1,000 widgets.
Variable cost = $5 per widget
Fixed cost = $5,000 per month
Using the relevant range assumption we need to find the increase in variable costs if you sell 5,000 widgets.
Variable cost 1,000 widgets = 1,000×5 = $5,000
Variable cost 5,000 widgets = 5,000×5 = $25,000
Increase in widgets = $25,000 - $5,000 = $20,000
Therefore, we need to add $20,000 in variable cost, if we sell 5,000 widgets.
Step-by-step explanation:
It is given that a company sell 1,000 widgets.
Variable cost = $5 per widget
Fixed cost = $5,000 per month
Using the relevant range assumption we need to find the increase in variable costs if you sell 5,000 widgets.
Variable cost 1,000 widgets = 1,000×5 = $5,000
Variable cost 5,000 widgets = 5,000×5 = $25,000
Increase in widgets = $25,000 - $5,000 = $20,000
Therefore, we need to add $20,000 in variable cost, if we sell 5,000 widgets
