At Raines Company, total fixed and variable costs are $480,000 at a production level of 140,000 units. The company has total fixed costs of $200,000.
-If Raines Company reduces production to 180,000 units then the fixed cost per unit will be
A) $1.18.
B) $1.15.
C) $1.00.
D) $1.11.

Question

Quizplus · Accepted Answer

Fixed costs remain constant at $200,000 regardless of production level. At 180,000 units, the fixed cost per unit is $200,000 / 180,000 = $1.11.

At Raines Company, Total Fixed and Variable Costs Are $480,000