Question

Use the Dynamic Exhibit to answer the following questions. Round your answers to two decimal places, if necessary. 1. When the number of units produced is 50,000, the total fixed cost is $ 500,000 and the cost per unit is $ . 2. When the number of units produced is 100,000, the total fixed cost is $ and the cost per unit is $ . 3. When the number of units produced is 150,000, the total fixed cost is $ and the cost per unit is $ . 4. When the number of units produced is 300,000, the total fixed cost is $ and the cost per unit is $

Answer 1

Ans: Concept: Total Fixed cost remain constant irrespective of units produced, however fixed cost per unit changes with change in production.

1. When the number of units produced is 50,000 : Total Fixed Cost = $ 500000

                                                                         Fixed Cost per unit= $ 500000/50000 = $10 per unit

2. When the number of units produced is 100,000 : Total Fixed Cost = $ 500000

                                                                         Fixed Cost per unit= $ 500000/100000 = $5 per unit

1. When the number of units produced is 150,000 : Total Fixed Cost = $ 500000

                                                                         Fixed Cost per unit= $ 500000/150000 = $ 3.33 per unit

1. When the number of units produced is 300,000 : Total Fixed Cost = $ 500000

                                                                         Fixed Cost per unit= $ 500000/300000 = $1.67 per unit