A company has $8.00 per unit in variable costs and $3.00 per unit in fixed costs

Question

A company has $8.00 per unit in variable costs and $3.00 per unit in fixed costs at a volume of 50,000 units. If the company uses cost plus pricing, which of the following is true?

A: The company should use a unit cost of $11.00 per unit only at a volume of 50,000 units
B: The company should use a unit cost of $11.00 at all volumes
C: The company should use a unit cost of $11.00 as long as it stays within the relevant range of volume
D: There is no volume at which the company should use a unit volume of 50,000

Explanation / Answer

C: The company should use a unit cost of $11.00 as long as it stays within the relevant range of volume

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