Total Fixed Costs for Excelsior Corporation Are $600,000

question 235

Multiple Choice

Total fixed costs for Excelsior Corporation are $600,000.Total costs,both fixed and variable,are $750,000 if 125,000 units are produced.The fixed cost per unit at 300,000 units would be:

• A)$6.00/unit.
• B)$0.50/unit.
• C)$4.80/unit.
• D)$2.00/unit.

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Definitions:

ATC

Average Total Cost, which is the total cost of production divided by the quantity of output produced, including both fixed and variable costs.

Marginal Cost

Marginal Cost is the increase in cost resulting from the production of one additional unit of a good.

Break-even Point

The production level where total revenues equals total expenses, and there is neither profit nor loss.

Perfectly Elastic

Perfectly elastic describes a situation where the quantity demanded or supplied responds infinitely or extremely to changes in price.