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Why does the fixed cost per unit change?

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Parker Trophies makes and sells trophies it distributes to little league ballplayers. The company normally produces and sells between 8,000 and 14,000 trophies each year. The following cost data apply to various activity levels.

a. Complete the preceding table by filling in the missing amounts for the levels of activity shown in the first row of the table. Round all cost per unit figures to the nearest whole penny.

b. Explain why the total cost per trophy decreases as the number of trophies increases.

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Solution Summary

This is a classic issue! This response answers the question and explains why fixed cost per unit changes.

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