Lets say a company in March produces 15,000 widgets per month. At that volume, their fixed costs are $45,000 and total variable costs are $75,000 for a total cost of $120,000.

• What is the fixed cost per unit and the variable cost per unit?

Then in April, the same company produces 18,000 widgets.

• What is the total cost for April?
• Which of the two cost behaviors change?
• Why did those costs change?