Consider the data in the table which applies to the provision of psychological testing services. Calculate the variable production cost per unit (one unit = one test) if the number of tests is 400 per month.   Sales per unit $320 Fixed costs (per month)        Selling and administration 16,000 Production overhead 16,000 Variable costs (per test)   Labor for oversight and feedback 140 Outsourced test analysis 22      Materials used in testing 7      Production overhead 15      Selling and administration 12

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Chapter22: Supply: The Costs Of Doing Business
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Consider the data in the table which applies to the provision of psychological testing services. Calculate the variable production cost per unit (one unit = one test) if the number of tests is 400 per month.

 

Sales per unit $320
Fixed costs (per month)  
     Selling and administration 16,000
Production overhead 16,000
Variable costs (per test)  
Labor for oversight and feedback 140
Outsourced test analysis 22
     Materials used in testing 7
     Production overhead 15
     Selling and administration 12

 

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