Answer:
The correct answer is D
Explanation:
The variable cost for the following is computed as:
Total variable cost = Produced units × Labor per unit + Produced units × Materials per unit
where
Produced units is 1,000,000
Labor per unit is $125 per unit
Materials per units is $45 per unit
Putting the values above:
Total variable cost = 1,000,000 × $125 + 1,000,000 × $45
Total variable cost = 125,00,000 + 45,000,000
Total variable cost = $170,000,000 or 170 million
Note: Rent is not the variable cost as rent is the fixed cost so will not involved above.
