Fixed cost per unit is $10 when 12,000 units are produced and $3 when 40,000 units are produced.What is the total fixed cost when nothing is produced?
A) $175,000
B) $200,000
C) $120,000
D) $100,000

Question

Fixed cost per unit is $10 when 12,000 units are produced and $3 when 40,000 units are produced.What is the total fixed cost when nothing is produced?  
A) $175,000
B) $200,000
C) $120,000
D) $100,000

Quizplus · Accepted Answer

Total fixed cost = Unit fixed cost × Number of units produced = $10 × 12,000 units or $3 × 40,000 units = $120,000

Fixed Cost Per Unit Is $10 When 12,000 Units Are