Question 1
When 24,000 units are produced, variable costs are $12.00 per unit. Therefore, when 18,000 units are produced ________.
◦ variable costs will remain at $12.00 per unit
◦ variable costs will total $288,000
◦ variable unit costs will increase to $16.00 per unit
◦ variable unit costs will decrease to $9.00 per unit
Question 2
When 25,000 units are produced, fixed costs are $21.00 per unit. Therefore, when 20,000 units are produced, fixed costs will ________.
◦ increase to $26.25 per unit
◦ remain at $21.00 per unit
◦ decrease to $16.80 per unit
◦ total $420,000