Answer :
The MBI's unit variable cost is $13.5 per unit.
Calculation:
Unit Total Cost, using F1 = 20*(1-20%) = $16.00.
Unit Fixed costs = $25,000/10,000 = $2.5.
Therefore, Unit variable cost = $16 - $2.5 = $13.5 per unit.
Variable costs are costs incurred when the number of goods or services produced by business changes. Variable cost is the sum of the marginal costs of all units produced. It can also be considered a normal expense. Fixed and variable costs form the two components of the total cost.
Variable costs are costs that change with changes in quantity. Examples of variable costs include raw materials parts labor production materials handling charges shipping charges packaging materials and credit card fees. In some fiscal documents, the variable costs of production are called manufacturing costs.
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