EA8. LO 2.2Suppose that a company has fixed costs of $18 per unit and variable costs $9 per unit when 15 2,00 units are produced. What are the fixed costs per unit when 12,000 units are produced?

Fixed costs per unit change with the number of units produced because they are spread out over more units, which reduces the cost per unit as production increases. 

When the company produces 2,000 units, the fixed costs are $18 per unit. However, when production increases to 12,000 units, the fixed costs will be spread over these 12,000 units instead of just 2,000.

To find the new fixed costs per unit when 12,000 units are produced, we can use the total fixed costs and divide by the new number of units produced. Since your initial information provides a per-unit fixed cost at a production level of 2,000 units, we should first calculate the total fixed costs and then divide by 12,000 units.

Total fixed costs = Fixed cost per unit * Number of units (at 2,000 units) 

= $18 unit * 2,000 units

 = $36,000

Now, we'll calculate the fixed cost per unit for 12,000 units.

Fixed cost per unit (at 12,000 units) 

= Total fixed costs / Number of units (at 12,000 units) 

= $36,000 / 12,000 units 

= $3 per unit

So the fixed costs per unit when 12,000 units are produced will be $3 per unit.