Randy Company produces tennis rackets. If the fixed cost per racket is 16$ when 125,000 rackets are produced, what is the fixed cost per racket when 40,000 rackets are produced? variable cost:   16-16              =    0                   125,000-40,000         85,000 total fixed cost: 125,000-(0X40,000)                         =125,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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Randy Company produces tennis rackets. If the fixed cost per racket is 16$ when 125,000 rackets are produced, what is the fixed cost per racket when 40,000 rackets are produced?

variable cost:   16-16              =    0

                  125,000-40,000         85,000

total fixed cost: 125,000-(0X40,000)

                        =125,000

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