When 27,000 units are produced, fixed costs are $18.00 per unit. Therefore, when 24,000 units are...

Question

Question

business accounting

Answer 1

Answer #1

Answer is (c) increase to $20.25 per unit.

Total fixed costs = 27,000 units * $18.00 per unit = $486,000.

Total fixed costs remain same irrespective of level of activity.

Therefore, when 24,000 units are produced, total fixed cost will remain same i.e. $486,000.

Fixed cost per unit = $486,000 / 24,000 units = $20.25 per unit.

We can say that when number of units produced are decreased fixed cost per unit is increased.

I hope I've explained to the point. Please feel free to ask any queries and do give a thumbsup if the solution was satisfactory. Thankyou.

Answer 2

Similar Homework Help Questions

When 27,000 units are produced, fixed costs are $18.00 per unit. Therefore, when 24,000 units are...

When 27,000 units are produced, fixed costs are $18.00 per unit. Therefore, when 24,000 units are produced, fixed costs will O A remain at $18.00 per unit B. total $432,000 O C. increase to $20.25 per unit OD. decrease to $16.00 per unit
When 24,000 units are produced, fixed costs are $15.00 per unit. Therefore, when 20,000 units are...

When 24,000 units are produced, fixed costs are $15.00 per unit. Therefore, when 20,000 units are produced, fixed costs will O A. total $300,000 O B. decrease to $12.50 per unit OC. remain at $15.00 per unit OD. Increase to $18.00 per unit
When 21,000 units are produced, variable costs are $14 00 per unit. Therefore, when 12,000 units...

When 21,000 units are produced, variable costs are $14 00 per unit. Therefore, when 12,000 units are produced O A. variable costs will total $294,000 O B. variable costs will remain at $14.00 per unit O C. variable unit costs will increase to $24.50 per unit O D. variable unit costs will decrease to $8.00 per unit

Within the relevant range, as the number of units produced increases: the variable cost per unit...

Within the relevant range, as the number of units produced increases: the variable cost per unit will increase O the fixed cost per unit will decrease O total variable costs will remain the same O total fixed costs will decrease
8. When activity volume increases in the short term, A. fixed costs per unit remain unchanged...

8. When activity volume increases in the short term, A. fixed costs per unit remain unchanged and variable costs per unit increase B. fixed costs per unit increase and variable costs per unit remain unchanged C. fixed costs per unit remain unchanged and variable costs per unit decrease D. fixed costs per unit decrease and variable costs per unit remain unchanged E. fixed costs per unit decrease and variable costs per unit increase
Under absorption costing, a company had the following per unit costs when 10,000 units were produced....

Under absorption costing, a company had the following per unit costs when 10,000 units were produced. Direct labor Direct materials Variable overhead Total variable cost Fixed overhead ($66,000/10,000 units) Total product cost per unit $ 2.80 3.80 4.80 11.40 6.60 $18.00 The company sells its product for $61.20 per unit. Due to new regulations, the company must now incur $2.80 per unit of hazardous waste disposal costs and $6,380 per year of fixed hazardous waste disposal costs. Compute the contribution...

uestIO At current sales volume of 100 units, fixed costs (FC) are $5 per unit and...

uestIO At current sales volume of 100 units, fixed costs (FC) are $5 per unit and variable costs (VC) are $10 per unit a) Compute total fixed costs at current sales volume. total FC- b) Suppose that sales volume increases to 125 units. At this new volume, total FC FC per unit - VC per unit total VC- c) Write down the total cost equation: TC- (e.g., if TC 500+2*volume, enter 500 in the first box and 2 in the...
Widget Inc, manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but...

Widget Inc, manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but it currently produces and sells 75,000 widgets per year. The following information relates to current production: Sales price per unit $42 Variable costs per unit: Manufacturing $22 O A. Increase by $89,600 O B. Increase by $212,800 O c. Decrease by $89,600 OD. Increase by $50,400 Click to select your answer. Marketing and administrative Total fixed costs Manufacturing Marketing and administrative $76,000 $24,000 If...
8. Fixed cost per unit is $7 when 25,000 units are produced and $5 when 35,000...

8. Fixed cost per unit is $7 when 25,000 units are produced and $5 when 35,000 units are produced. What is the total fixed cost when nothing is produced? (4 points) a. $130,000. b. $200,000 c. $12. d. $175,000

1) 2) 3) 4) 5) If variable costs per unit decreased because of a decrease in...

1) 2) 3) 4) 5) If variable costs per unit decreased because of a decrease in utility rates, the break-even point would Oa. decrease Ob. increase Oc. remain the same Od. increase or decrease, depending upon the percentage increase in utility rates If sales are $400,000, variable costs are 80% of sales, and operating income is $40,000, what is the operating leverage? Oa. 0.0 Ob. 1.3 Oc. 7.5 Od. 2.0 If fixed costs are $561,000 and the unit contribution margin...