At Dwight Incorporated, total fixed and variable costs are $420,000 at a production level of 130,000 units. The company has total fixed costs of $225,000. The variable cost per unit at 200,000 units is .

$1.5

Explanation:

Variable costs are the expenses that change with the production level. They increase as output increase and decrease as production decline.

Fixed cost remains constant throughout the period.

For Dwight: Total fixed and variable costs are $420,000 at 130,000 production levels. If fixed costs is $225,000, then the variable cost will be

=$ 420,000- $225,000

=$195,000

Variable cost at 130,000 units are $195,000

total cost divided by units produced

variable cost per units = 195,000/130,000

=$1.5

At 200,000 units fixed will remain at $225,000 but variable cost rate will be $1.5

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