Snead currently produces 120,000 units at a cost of $400,000.Of the $400,000 cost,$200,000 is a fixed cost.Next year Snead expects to produce 145,000 units.Snead's relevant range for production activities is 100,000 to 150,000 units.If 145,000 units are produced next year,what is the expected fixed cost for next year?
A)$200,000
B)$241,667
C)$265,833
D)$483,333

Question

Quizplus · Accepted Answer

The fixed cost remains constant within the relevant range of production, so it will still be $200,000 next year.

Snead Currently Produces 120,000 Units at a Cost of $400,000