The following data pertain to costs at Martin Company:

-If Martin Company increased production to 50,000 units then the fixed cost per unit would be
A) $6.25.
B) $5.00.
C) $8.75.
D) $1.50.

Question

The following data pertain to costs at Martin Company:
 
-If Martin Company increased production to 50,000 units then the fixed cost per unit would be
A) $6.25. 
B) $5.00. 
C) $8.75. 
D) $1.50.

Quizplus · Accepted Answer

To calculate the fixed cost per unit, we need to use the formula:
Fixed Cost per Unit = Total Fixed Costs / Total Units Produced
Using the data in the table, if Martin Company produces 50,000 units, the total fixed cost would be $250,000 (5000 x $50). 
Therefore, the fixed cost per unit would be $5.00 ($250,000/50,000 units). 
Hence, the answer is B.

The Following Data Pertain to Costs at Martin Company