Question

Fanning Corporation incurs the following annual fixed costs: Item Cost Depreciation $ 80,000 Officers’ salaries 190,000...

Fanning Corporation incurs the following annual fixed costs: Item Cost Depreciation $ 80,000 Officers’ salaries 190,000 Long-term lease 42,000 Property taxes 48,000 Required Determine the total fixed cost per unit of production, assuming that Fanning produces 4,000, 4,500, or 5,000 units.

Homework Answers

Answer #1
Item Cost
Depreciation $80,000
Officers’ salaries 190,000
Long-term lease    42,000
Property taxes    48,000
Total Fixed Cost $     360,000
Total Fixed Cost $360,000 $360,000 $360,000
÷ Units of production 4000 4500 5000
Fixed cost per unit $          90.00 $     80.00 $     72.00
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