Homework Answers
SOLUTION
Option C is correct i.e. $3.43
Maximum cost per unit = (Desired profit - Unavoidable fixed costs) / Units produced
= ($99,000 - $20,000) / 23,000
= 79,000 / 23,000 = $3.43
Unavoidable fixed costs = Fixed costs / Percentage of avoidable fixed costs
= $40,000 * 50% = $20,000
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