Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced.What is the total fixed cost when nothing is produced?
A)$15
B)$120,000
C)$180,000
D)$270,000

Question

Quizplus · Accepted Answer

Fixed cost remains constant regardless of the number of units produced. At 20,000 units, the total fixed cost is 20,000 units * $9/unit = $180,000. At 30,000 units, the total fixed cost is 30,000 units * $6/unit = $180,000. Therefore, the total fixed cost when nothing is produced is also $180,000.

Fixed Cost Per Unit Is $9 When 20,000 Units Are