Millar Company produces a single product that it sells for $89 a unit. If the fixed costs of manufacturing and selling the product are $68,400 a month and the variable costs are $57 a unit, which of the below is correct?Multiple ChoiceThe fixed costs amount to $32 per unit at any level of output within a relevant volume range.The company will break even with a sales volume of $68,400 a month.An increase in sales volume above $68,400 a month will cause an increase in fixed costs.The contribution margin per unit of product is $32.
Question
Millar Company produces a single product that it sells for 68,400 a month and the variable costs are 32 per unit at any level of output within a relevant volume range.The company will break even with a sales volume of 68,400 a month will cause an increase in fixed costs.The contribution margin per unit of product is $32.
Solution
The fixed costs amount to $32 per unit at any level of output within a relevant volume range.
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