At a sales volume of 37,000 units, Bonham Corporation's property taxes (a cost that is fixed with respect to sales volume) total $555,000.
-To the nearest whole cent, what should be the average property tax per unit at a sales volume of 38,600 units? (Assume that this sales volume is within the relevant range.)

Question

Quizplus · Accepted Answer

The property tax is a fixed cost, so it remains $555,000 regardless of the sales volume. To find the average property tax per unit at 38,600 units, divide $555,000 by 38,600, which equals approximately $14.38.

At a Sales Volume of 37,000 Units, Bonham Corporation's Property