Units produced 12 000 15 000
Direct materials $36 000 $45 000
Based on the above data, at the production level of 10 000 units, the fixed costs per unit are $5 per unit and if the firm produced 8000 units the fixed cost per unit would remain constant at $5.

Question

Quizplus · Accepted Answer

Fixed costs per unit change with the level of production; they are not constant per unit. As production decreases, fixed costs per unit increase because the total fixed costs are spread over fewer units.

Units Produced 12 000 15 000