Homework Answers
Average fixed manufacturing overhead = $3 per unit ( at output of 4,000 units)
Total fixed manufacturing overhead = Fixed manufacturing overhead per unit x Number of units
= 3 x 4,000
= $12,000
Average fixed manufacturing overhead cost when 5,000 units are produced = Total fixed manufacturing overhead/ Number of units
= 12,000/5,000
= $2.40
Total fixed manufacturing overhead will not increase when output is increased from 4,000 units to 5,000 units.
Correct option is b.
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