Pauley company provides home health care. pauley charges $35/hour for professional care. variable costs are $21/hour and fixed costs are $78,000. next year, pauley expects to charge out 12,000 hours of home health care. what is the variable cost ratio?
a)50%
b)60%
c)40%
d)33%
e)67%

The correct answer is B.

Explanation:

Giving the following information:

Pauley charges $35/hour for professional care. Variable costs are $21/hour and fixed costs are $78,000. Next year, Pauley expects to charge out 12,000 hours of home health care.

Variable cost ratio= unitary variable cost/ selling price= 21/35= 0.6= 60%

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