Maxwell Company has a total expense per unit of $2.00 per unit at the 16,000-unit level of activity, and total expense per unit of $1.95 at the 21,000-unit level of activity.
-What is the best estimate of the total fixed cost per period for Maxwell Company?
A) $3,360.
B) $29,190.
C) $32,000
D) $40,950.

Question

Quizplus · Accepted Answer

The total fixed cost per period is the difference between the total expense per unit at the 16,000-unit level of activity and the total expense per unit at the 21,000-unit level of activity, multiplied by the difference in the number of units between the two levels of activity. In this case, the total fixed cost per period is $2.00 - $1.95 = $0.05 per unit, multiplied by 21,000 - 16,000 = 5,000 units, which equals $250.

Maxwell Company Has a Total Expense Per Unit of $2