Question

Direct materials are $15 per unit; direct labor is $7 per unit and variable overhead costs are $2 per unit. If total product costs are $27, what are fixed costs per unit

Answer 1

the Fixed cost per unit is $3

Step-by-step explanation:

The computation of the fixed cost per unit is shown below:

Total cost per unit = Direct Material cost per unit + Direct labor cost per unit + variable Overhead cost per unit + Fixed cost per unit

$27 = $15 + $7 + $2 + Fixed cost per unit

$27 = $24 + Fixed cost per unit

So,

Fixed cost per unit is

= $27 - $24

= $3

hence, the Fixed cost per unit is $3