Sandhill incurs the following costs

Total fixed costs $1600000 

Gross margin $ 1300000. 

Direct material $0.10 

Direct labor 0.20 

Variable overhead 0.05 

Fixed overhead 0.80 

Total per unit $1.15

If sandhill incurs exactly the same total fixed costs but produces and sells only 1600000 notebooks this coming year, what happens to the fixed cost per unit? In turn what would the total cost per unit be? if the average selling price stays at $1.80, how much gross margin would be earned? 

a. fixed costs "increased or decreased" by $ ____ per unit

b. total cost per unit $ ___ per unit

c. Gross margin $____

Answer rating: 100% (QA)

To calculate the changes in fixed cost per unit total cost per unit and gross margin we need to anal... View the full answer