Joshua Company Produces and Sells a Product That Has Variable

Multiple Choice

Joshua Company produces and sells a product that has variable costs of $7 per unit and fixed costs of $200,000 per year. If production increases from 20,000 units to 25,000 units, the unit cost will:

A) decrease by $2 per unit
B) decrease by $8 per unit
C) increase by $35,000
D) not change