# Last month, Sprockets, Inc., manufactured 12,000 widgets. The firm’s total cost for making the widgets was \$240,000.

Last month, Sprockets, Inc., manufactured 12,000 widgets. The firm’s total cost for making the widgets was \$240,000. Of that amount, \$60,000 was due to fixed costs, and the rest was due to variable costs. Next month, Sprockets expects to manufacture 15,000 widgets. Assuming the firm’s monthly fixed costs and variable cost per unit remain the same, which of the following statements is accurate?

• A
•  :
•  Sprockets’ average fixed cost per widget will drop to \$3, and its total manufacturing costs will increase to \$360,000.
• B
•  :
•  Sprockets’ average fixed cost per widget will drop to \$4, and its total manufacturing costs will increase to \$285,000.
• C
•  :
•  Sprockets’ average fixed cost per widget will drop to \$3, and its total manufacturing costs will remain constant at \$240,000.
• D
•  :
•  Sprockets’ average fixed cost per widget will remain at \$5, and its total manufacturing costs will increase to \$285,000.

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Last month, Sprockets, Inc., manufactured 12,000 widgets. The firm’s total cost for making the widgets was \$240,000. was first posted on August 10, 2020 at 12:28 pm.