When calculating the cost per unit, if we sell more units, but our fixed costs remain...

Question

Question

When calculating the cost per unit, if we sell more units, but our fixed costs remain the same, or total cost per unit will:

Answer 1

Answer #1

Ans.	Option 1st Go down

	*Fixed cost per unit is calculated by using the following formula:

	*Fixed cost per unit = Total fixed cost / No. of units sold

	*If number of units sold increase it means the fixed cost per unit will be decrease because total fixed cost
	remain same on each level of activity and number of units sold is a denominator.
	In simple words, if denominator increases and nominator (total fixed cost) remain same then the result
	is less than the previous situation.

Answer 2

Similar Homework Help Questions

We sell our product for $20 per unit, variable costs of $10 and fixed costs of...

We sell our product for $20 per unit, variable costs of $10 and fixed costs of $200,000. If we sell 25,000 units, how much is our margin of safety in dollars?
We make and sell a single product. Our selling price is $2.50 per unit. Variable cost...

We make and sell a single product. Our selling price is $2.50 per unit. Variable cost per unit is $1.00. We expect fixed costs to total $18,000 for next year. What would our total sales dollars have to be next year in order to generate $45,000 of net income? A. $45,000 B. $18,000 Oc. $42,000 OD. $105,000 Reset Selection
If we sell our product for $20 per unit, variable costs of $10 and fixed costs...

If we sell our product for $20 per unit, variable costs of $10 and fixed costs of $200,000. What sales revenue (in dollars) is needed to attain a $60,000 profit?

If we sell our product for $20 per unit. Next year, fixed expenses are expected to...

If we sell our product for $20 per unit. Next year, fixed expenses are expected to be $400,000 and variable expenses are expected to be $12 per unit. Compute the break even point in units. How many units must we sell to generate a target profit of $100,000?
If Sales Price and product costs per unit remain constant, Group of answer choices Gross Margin...

If Sales Price and product costs per unit remain constant, Group of answer choices Gross Margin (gross profit %) will increase as more units are sold Gross Margin (gross profit %) will decrease if we produce more units than we sell Gross Margin (gross profit %) will increase with an increase in Cost of Goods Manufactured Gross Margin (Gross Profit %) will stay the same regardless of volume produced or sold
When 24,000 units are produced, fixed costs are $15.00 per unit. Therefore, when 20,000 units are...

When 24,000 units are produced, fixed costs are $15.00 per unit. Therefore, when 20,000 units are produced, fixed costs will O A. total $300,000 O B. decrease to $12.50 per unit OC. remain at $15.00 per unit OD. Increase to $18.00 per unit

When 27,000 units are produced, fixed costs are $18.00 per unit. Therefore, when 24,000 units are...

When 27,000 units are produced, fixed costs are $18.00 per unit. Therefore, when 24,000 units are produced, fixed costs will O A remain at $18.00 per unit B. total $432,000 O C. increase to $20.25 per unit OD. decrease to $16.00 per unit
When 27,000 units are produced, fixed costs are $18.00 per unit. Therefore, when 24,000 units are...

When 27,000 units are produced, fixed costs are $18.00 per unit. Therefore, when 24,000 units are produced, fixed costs will O A remain at $18.00 per unit B. total $432,000 O C. increase to $20.25 per unit OD. decrease to $16.00 per unit
8. When activity volume increases in the short term, A. fixed costs per unit remain unchanged...

8. When activity volume increases in the short term, A. fixed costs per unit remain unchanged and variable costs per unit increase B. fixed costs per unit increase and variable costs per unit remain unchanged C. fixed costs per unit remain unchanged and variable costs per unit decrease D. fixed costs per unit decrease and variable costs per unit remain unchanged E. fixed costs per unit decrease and variable costs per unit increase

For a manufacturing company has total monthly fixed costs of $100,000, variable costs per units $10,...

For a manufacturing company has total monthly fixed costs of $100,000, variable costs per units $10, income tax rate of 20%, targeted net income of $10,000. Assume all other variables do not affect the cost volume profit relationship, if sales in units (quantities) increase, fixed cost per unit as a percentage of unit sales 1. increase 2. decrease 3. remain constants 4. we cannot find, we need more information