XYZ Company generally produces between 200 and 350 units of product. Its fixed costs, within this relevant range, are $50,000. Its variable costs at 250 units of production are $10 per unit. What are the fixed costs per unit at 250 and 300 units of production, respectively? (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

To find the fixed costs per unit, we need to use the following formula:

Fixed costs per unit = Total fixed costs / Units produced

At 250 units of production, the fixed costs per unit would be:

Fixed costs per unit = $50,000 / 250 units
Fixed costs per unit = $200/unit

At 300 units of production, the fixed costs per unit would be:

Fixed costs per unit = $50,000 / 300 units
Fixed costs per unit = $167/unit

Therefore, the correct answer is C.

XYZ Company Generally Produces Between 200 and 350 Units of Product