6-41 Unit Costs

Brandon Company produces and sells a product that has variable costs of $8 per unit and fixed costs of $250,000 per year.

1. Compute the unit cost at a production and sales level of 10,000 units per year.

2. Compute the unit cost at a production and sales level of 20,000 units per year.

3. Which of these unit costs is most accurate? Explain.