Pedro Company has total fixed costs of $480,000. Total fixed and variable costs are $600,000 at a production level of 125,000 units.
-At Pedro Company the fixed cost per unit at a production level of 300,000 units is
A) $4.00.
B) $3.20.
C) $2.00.
D) $1.60.

Question

Quizplus · Accepted Answer

Fixed costs remain constant regardless of the level of production. Therefore, the fixed cost per unit at a production level of 300,000 units is $480,000 / 300,000 units = $1.60.

Pedro Company Has Total Fixed Costs of $480,000