Finch Corporation incurs the following annual fixed costs: Item Cost Depreciation $ 57,000 Officers’ salaries 180,000...

Finch Corporation incurs the following annual fixed costs:

Item	Cost
Depreciation	$	57,000
Officers’ salaries		180,000
Long-term lease		80,000
Property taxes		14,000

Required

Determine the total fixed cost per unit of production, assuming that Finch produces 3,000, 3,500, or 4,000 units. (Round your answers to 2 decimal places.)

Solutions

Expert Solution

	3,000 units	3,500 units	4,000 units
Total fixed costs ($57,000+180,000+80,000+14,000)	$ 331,000	$ 331,000	$ 331,000
Fixed cost per unit	$331,000/3,000 = $110.33	$331,000/3,500 = $94.57	$331,000/4,000 = $82,75

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