London Plastics has monthly fixed costs of $87,000, while its variable costs are $4.60 per unit. If the sales price of a unit is $14.00 and London Plastics sell 15,000 units, the company's average fixed costs per unit will be
A)$5.80 per unit.
B)$10.40 per unit.
C)$4.60 per unit.
D)$9.40 per unit.

Question

Quizplus · Accepted Answer

Average fixed costs per unit are calculated by dividing the total fixed costs by the number of units sold. So, $87,000 / 15,000 units = $5.80 per unit.

London Plastics Has Monthly Fixed Costs of $87,000, While Its