Question

On the unit cost graph, why are variable costs per unit horizontal and fixed while total...

On the unit cost graph, why are variable costs per unit horizontal and fixed while total costs per unit are downward sloping?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Because a fixed cost per unit is decreasing.

-------

total cost per unit is the sum of variable cost per unit and fixed cost per unit.

Fixed cost is the same at all level of output, and fixed cost per unit decreases as output increases.

The variable cost per unit is horizontal and fixed means it is constant per unit.

total cost per unit =variable cost per unit + fixed cost per unit

variable cost per unit is fixed

fixed cost per unit is decreasing

it means the total cost per unit is also decreasing.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Calculate the total variable cost per unit. Variable cost per unit Calculate the total fixed expense...
Calculate the total variable cost per unit. Variable cost per unit Calculate the total fixed expense for the year. Total fixed expense for the year Operating income Operating loss Sales Total contribution margin Total fixed cost Total variable cost Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Product costs include: Direct materials per helmet $ 30 Direct labor per helmet 8 Variable factory overhead per helmet 4 Total fixed factory overhead 20,000 Variable...
Total fixed cost = $66,000 Selling price per unit = $14 Variable costs per unit =...
Total fixed cost = $66,000 Selling price per unit = $14 Variable costs per unit = $6 Net target income (after tax) = $52,000 Tax rate = 35%. a)Calculate break even point in units b) calculate the sales revenue (in dollars) required to achieve the target income c) calculate the difference in operating income when one extra unit is sold d) if fixed cost increased by 20%, what is the new unit contribution margin required to maintain the same break-even...
Consider a firm that is currently producing 600 sofas a month. The monthly fixed cost is...
Consider a firm that is currently producing 600 sofas a month. The monthly fixed cost is $1,920, while the average total cost is $72 (the average total cost curve has the usual shape). Producing the 600th sofa increased the firm’s total costs by $70. At Q = 600, is the firm’s average variable cost curve upward sloping, horizontal, downward sloping, or vertical? Why? Explain clearly your reasoning in words.
Sales Price: $50.00 per unit Variable Costs: $20.00 per unit Total Fixed Costs: $90,000 What is...
Sales Price: $50.00 per unit Variable Costs: $20.00 per unit Total Fixed Costs: $90,000 What is the break-even point in sales dollars?
If variable manufacturing costs are $10 per unit and total fixed manufacturing costs are $631,900, what...
If variable manufacturing costs are $10 per unit and total fixed manufacturing costs are $631,900, what is the manufacturing cost per unit if: a. 7,100 units are manufactured and the company uses the variable costing concept? b. 8,900 units are manufactured and the company uses the variable costing concept? c. 7,100 units are manufactured and the company uses the absorption costing concept? d. 8,900 units are manufactured and the company uses the absorption costing concept?
If variable manufacturing costs are $12 per unit and total fixed manufacturing costs are $596,400, what...
If variable manufacturing costs are $12 per unit and total fixed manufacturing costs are $596,400, what is the manufacturing cost per unit if a. 7,100 units are manufactured and the company uses the variable costing concept? $___________ b. 8,400 units are manufactured and the company uses the variable costing concept? $___________ c. 7,100 units are manufactured and the company uses the absorption costing concept? $__________ d. 8,400 units are manufactured and the company used the absorption costing concept? $__________
Warson Manufacturing sells a product for $1,200 per unit. Fixed costs are $32,000, while the variable...
Warson Manufacturing sells a product for $1,200 per unit. Fixed costs are $32,000, while the variable costs are $400 per unit. If the company has a 20% margin of safety, how many units were actually sold?
Fixed manufacturing costs are $42 per unit, and variable manufacturing costs are $126 per unit. Production...
Fixed manufacturing costs are $42 per unit, and variable manufacturing costs are $126 per unit. Production was 89,000 units, while sales were 83,660 units. b. Determine the difference in variable costing and absorption costing operating income. $
Total fixed costs = $1,000,000 Unit Price = $5,515 Unit Variable Cost = $2,170 Find the...
Total fixed costs = $1,000,000 Unit Price = $5,515 Unit Variable Cost = $2,170 Find the breakeven volume. What happens to the breakeven volume if the unit price falls to $5,000 and unit variable cost rises to $2,500? Discuss your findings and show all work!
A company has $6.70per unit in variable costs and $3.00 per unit in fixed costs at...
A company has $6.70per unit in variable costs and $3.00 per unit in fixed costs at a volume of 50,000 units. If the company marks up total cost by 0.54, what price should be changed if 57,000 units are expected to be sold? Round to two decimal places
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT