Q20E
Question
Question: Determining fixed cost per unit
For each total fixed cost listed below, determine the fixed cost per unit when sales are 50, 100, and 200 units.
Store rent $ 5,000
Manager’s salary 3,000
Equipment lease 500
Depreciation on fixtures 250
Step-by-Step Solution
Verified Answer
Answer
The fixed cost per unit for 50 units is $175 per unit, for 100 units is $87.5, for 200 units is $43.75
1Step 1: Calculation of total fixed cost
Particulars | Amount |
Store rent | $5000 |
Manager’s salary | $3000 |
Equipment lease | $500 |
Depreciation on fixtures | $250 |
Total fixed cost | $8,750 |
2Step 2: Calculation of fixed cost per unit
| 50 | 100 | 200 |
Total fixed cost | $8,750 | $8,750 | $8,750 |
÷ No. of units sold | 50 | 100 | 20 |
Fixed cost per unit | $175 | $87.5 | $43.75 |
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