Oerther Corporation reports that at an activity level of 5,000 units, its total variable cost is $131,750 and its total fixed cost is $31,200.What would be the average fixed cost per unit at an activity level of 5,200 units? Assume that this level of activity is within the relevant range.
A) $6.24
B) $6.00
C) $14.94
D) $32.59

Question

Quizplus · Accepted Answer

The total fixed cost remains constant at $31,200 regardless of the activity level. At 5,200 units, the average fixed cost per unit is $31,200 / 5,200 = $6.00.

Oerther Corporation Reports That at an Activity Level of 5,000