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Essay text:
Since we are staying with the relevant range the total fixed cost will not change with the change in units sold (Horngren et al., 2008).
Requirement # (2) at 1,000 Units
The cost per unit of the material is: .65 cents per unit ($650/1,000 units).
The cost per unit for rent is: $9.00 per unit ($9,000/1000 units)
Total variable cost .65 x 1,000= 650
Total fixed cost = 9,000
Total fixed and variable = 9,650
Requirement # (3) at 6,000 Units
Variable cost per unit is .65 (it does not change)
Total of variable cost = .65 cost per unit x 6,000 total units = $3,900
Unit cost of fixed cost = $9,000/6,000 Units = 1...
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