Fixed costs are $225,600 when 12,000 units are produced.
Total cost is the phrase used to describe the total cost of ownership, which considers an asset's original purchase price and the expenses of continuous operations, maintenance, and repairs.
At a production level of 10,000 units,
Total cost = $120,000
Variable costs = $48,000
Fixed cost = Total cost - Variable cost
= $120,000 - $48,000
= $168,000
Therefore,
Variable cost per unit = Variable cost ÷ No. of units
= $48,000 ÷ 10,000
= $4.8
Consequently, at the 12,000-unit manufacturing level,
Total costs:
= Fixed cost + Variable cost
= $168,000 + ($4.8 × 12,000)
= $168,000 + $57600
= $225 600
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