When 10 000 units are produced,fixed costs are $15 per unit.Therefore,when 30 000 units are produced,fixed costs will:
A)total $450 000.
B)decrease to $5 per unit.
C)remain at $15 per unit.
D)increase to $45 per unit.

Question

Quizplus · Accepted Answer

Fixed costs per unit decrease as the number of units produced increases because the total fixed costs are spread over more units. In this case, if fixed costs are $15 per unit at 10,000 units, the total fixed costs are $150,000 ($15 * 10,000). When production increases to 30,000 units, the total fixed costs remain the same ($150,000), but when divided by 30,000 units, the cost per unit decreases to $5 per unit ($150,000 / 30,000).

When 10 000 Units Are Produced,fixed Costs Are $15 Per