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.
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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