The number of units the company can manufacture in a month is 270 units.
The company's total allocation for a month = 20,000.
Fixed cost = 15,000.
Variable cost per unit = 18.50.
We need to find the number of units the company can manufacture in a month when the fixed cost is 15,000 and the variable cost per unit is 18.50.
The maximum amount the company can spend in a month is 20,000 with
15,000 is a fixed cost.
So we are left with only 5000 for variable cost.
i.e
20,000 - 15,000 = 5000.
Now,
Since the variable cost for each unit is 18.50.
The number of units the company can make in a month is:
= 15000 / 18.50
= 270 units.
Thus the number of units the company can manufacture in a month is 270 units if the company has to spend 20,000 in a month with a fixed cost of 15,000 and a variable cost of 18.50 per unit.
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