Question

At a production and sales level of 2,400 units, Bastion Company incurred $78,000 of fixed cost and $72,000 of variable cost. When 7,600 units of product are produced and sold the company's cost per unit is:_________.

Answer 1

Answer:

The cost per unit of the company amounts to $ 20

Explanation:

For 2,400 units

Fixed cost per unit is computed as:

Fixed cost per unit = Fixed cost / units

= $78,000 / 2,400

= $32.5

Variable cost per unit is computed as:

Variable cost per unit = Variable cost / units

= $72,000 / 2,400

= $30

For 7,600 units

The cost per unit will be:

Fixed cost per unit = Fixed cost / units

= $78,000 / 7,600

= $10.26

Variable cost per unit = Variable cost / units

= $72,000 / 7,600

= $9.47

S0, the company total cost per unit will be $19.73 or $20 ($10.26 + $9.47)