Maxim Company incurred $70,000 ($30,000 of total fixed cost and $40,000 of total variable cost) when 1,000 units of a given product were produced. If 2,000 units are made, the company’s total cost will be:

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Maxim Company incurred $70,000 ($30,000 of total fixed cost and $40,000 of total variable cost) when 1,000 units of a given product were produced. If 2,000 units are made, the company’s total cost will be:

A. $100,000
B. $110,000
C. $130,000
D. $140,000

Answer: B

40,000 / 1,000 = $40 per unit
2,000 * 40 = 80,000
+ 30,000
= 110,000

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