Iguana company sells a single product iguana estimates

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Iguana Company sells a single product. Iguana estimates demand and costs at various activity levels as follows:

Units Sold

Price

Total Variable Costs

Fixed Costs

120,000

$48

$3,000,000

$1,000,000

140,000

$45

$3,500,000

$1,000,000

160,000

$40

$4,000,000

$1,000,000

180,000

$35

$4,500,000

$1,000,000

200,000

$30

$5,000,000

$1,000,000

How would you best describe Iguana's variable cost per unit over the range shown?

a) It is decreasing as volume increases.

b) It is first increasing as volume increases, then decreasing.

c) It is constant.

d) It is increasing as volume increases.

Reference no: EM13477995

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