Question

Advantage, Inc., a tennis equipment​ manufacturer, has variable costs of $ 0.80 per unit of product. In​ August, the volume of production was 27 comma 000 ​units, and units sold were 21 comma 400. The total production costs incurred were $ 30 comma 800. What are the fixed costs per​ month?

Answer 1

Total fixed cost= $9,200

Step-by-step explanation:

Giving the following information:

variable costs= $0.80 per unit.

production= 27,000 ​units

The total production costs incurred were $30,800.

First, we need to calculate the total variable cost at the production level of 27,000 units.

Total variable cost= 0.8*27,000= $21,600

Total cost= total fixed cost + total variable cost

30,800= total fixed cost + 21,600

Total fixed cost= 30,800 - 21,600

Total fixed cost= $9,200