Fasheh Corporation's Relevant Range of Activity Is 7,000 Units to 11,000

question 269

Multiple Choice

Fasheh Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows:

-If 10,000 units are produced,the average fixed manufacturing cost per unit produced is closest to:

• A) $15.00
• B) $12.83
• C) $13.50
• D) $12.15

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Definitions:

Marginal Cost (MC)

The expense incurred from manufacturing an extra unit of a product or service.

Marginal Revenue

The additional income that a firm earns from selling one more unit of a good or service, critical for determining optimal production levels.

Total Profit

The total revenue of a business after subtracting all costs and expenses related to its operation.

Profit Per Unit

Profit per unit is the amount of money earned from selling one unit of a product or service, calculated by subtracting the cost per unit from the selling price per unit.