Melissa Company produces and sells a product that has variable costs of $8 per unit and fixed costs of $240,000 per year._____ is the cost per unit if 20,000 units per year are produced and sold.
A)$8
B)$20
C)$5
D)$12

Question

Quizplus · Accepted Answer

To find the cost per unit when 20,000 units are produced and sold, you need to consider both variable and fixed costs. The variable cost per unit is $8. The total fixed costs are $240,000. When producing 20,000 units, the fixed cost per unit is $240,000 / 20,000 = $12. Therefore, the total cost per unit is the sum of the variable cost and the fixed cost per unit, which is $8 + $12 = $20.

Melissa Company Produces and Sells a Product That Has Variable