Answer to Question #244952 in Financial Math for Katie

Question

Well company incurred $30,000 of fixed cost and 40,000 variable cost 2000 units of product were made and sold. It's a company as volume doubles the cost per unit will ____.

Answer 1

F.C= $30000

V.C= $40000

T.C= F.C+V.C

=$70000

Cost per unit= $70000÷2000

=35

If the production is doubled, the V.C doubles

F.C= $30000

V.C= $80000

T.C= $110000

Cost per unit= $110000÷4000

=$27.5