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fixed costs

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › fixed costs

  • This topic has 1 reply, 2 voices, and was last updated 2 months ago by John Moffat.
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  • May 20, 2022 at 4:10 pm #656089
    kashafaltaf500
    • Topics: 14
    • Replies: 6
    • ☆

    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
    • Replies: 49993
    • ☆☆☆☆☆

    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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