Computing unit costs at different levels of production Perfumeria, Inc., budgeted for 12,000 bottles of product Si during the month of May. The unit cost of Si was \(\$ 20\), consisting of direct materials, \$7; direct labor, \$8; and factory overhead, \(\$ 5\) (fixed, \(\$ 3\); variable, \(\$ 2\) ).

a. What would be the unit cost if 10,000 units were manufactured? (Hint: You must first determine the total fixed costs.)

b. What would be the unit cost if 20,000 units were manufactured?

c. Explain why a difference occurs in the unit costs.