If variable costs are $10 per unit, fixed costs are $300 000, and expected unit sales are 50 000 the unit cost is
A) $20.00.
B) $16.00.
C) $10.00.
D) $12.00.
E) $6.00.

Question

Quizplus · Accepted Answer

The unit cost is calculated by adding the variable cost per unit to the fixed cost per unit. Fixed cost per unit is $300,000 / 50,000 units = $6. Therefore, the total unit cost is $10 (variable cost) + $6 (fixed cost per unit) = $16.

If Variable Costs Are $10 Per Unit, Fixed Costs Are