Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

A manufacturer aims for a profit of $80000$ per annum. In the previous year, the business earned a profit of $60000$ when $10000$ units were made and sold. The contribution was $10$ per unit. To reach the target profit, the plan is to raise advertising by $10000$ per annum. The variable cost per unit and the selling price per unit will stay the same. What would the total fixed cost be if this plan is implemented?

  • A$20000$
  • B$30000$
  • C$40000$
  • D$50000$

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