What is the amount of the fixed cost per unit under the pessimistic case scenario?

Name: What is the amount of the fixed cost per unit under the pessimistic case scenario?
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Question

Quizplus · Accepted Answer

Under pessimistic case scenario:
Fixed cost = $240,000
Number of units = 50,000 units
Fixed cost per unit = $240,000/50,000 units = $4.80/unit
However, the question mentioned that the government subsidy reduced the fixed cost by 2%, so the fixed cost per unit = $4.80*(1-0.02) = $4.38/unit. 
Therefore, the answer is A) $4.38.

What Is the Amount of the Fixed Cost Per Unit