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8 December, 15:53

EB8.

LO 2.2Suppose that a company has fixed costs of $11 per unit and variable costs $6 per unit when 11,000 units are produced. What are the fixed costs per unit when 20,000 units are produced?

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  1. 8 December, 16:58
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    The fixed costs per unit when 20,000 units are produced are $6.05 per unit.

    Explanation:

    Fixed costs per unit can be determined by using the following formula:

    Fixed costs per unit = Total fixed costs / number of units are produced

    In a company, Total fixed costs do not depend on the level of activity (Fixed costs do not change).

    In the company, Total fixed cost = $11 x 11,000 = $121,000

    When 20,000 units are produced, Fixed costs per unit = $121,000/20,000 = $6.05 per unit.
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Home » Business » EB8. LO 2.2Suppose that a company has fixed costs of $11 per unit and variable costs $6 per unit when 11,000 units are produced. What are the fixed costs per unit when 20,000 units are produced?
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