Boyko, Inc. has fixed costs of $ 300 comma 000. Total costs, both fixed and variable, are $ 450 comma 000 when 37 comma 000 units are produced. Calculate the total costs if the volume increases to 78 comma 000 units. (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A. $ 750 comma 000 B. $ 150 comma 000 C. $ 450 comma 000 D. $ 615 comma 900

The correct answer is D.

Explanation:

Giving the following information:

Boyko, Inc. has fixed costs of $300,000.

Total costs, both fixed and variable, are $450,000 when 37,000 units are produced.

First, we need to calculate the unitary variable cost. We will separate the fixed cost from the total cost and then divide it for the number of units:

Total variable cost= total cost - fixed cost

Total variable cost= 450,000 - 300,000= 150,000

Unitary cost= 150,000/37,000= $4.05 per unit

Now, we can calculate the total cost of 78,000 units:

Total cost= 300,000 + (78,000*4.05)= $615,900

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