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fixed costs

This topic has 1 reply, 2 voices, and was last updated 8 months ago by John Moffat.

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May 20, 2022 at 4:10 pm #656089
kashafaltaf500
Member
- Topics: 19
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A company has a single product with a selling price of $12 per unit, which is calculated as variable cost
per unit, plus 20%. At an output level of 5,000 units it makes a loss of $8,000
What is the company’s total fixed cost?
A $2,000
B $4,000
C $18,000
D $20,000
can you please help me solve this i dont know how do i solve this
May 21, 2022 at 7:59 am #656110
John Moffat
Keymaster
- Topics: 57
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You know that the contribution per unit is 20/120 x $12 = $2 per unit.
Therefore you can calculate total contribution, and then you can calculate the fixed costs that result in a loss of $8,000.
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