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Question - Jack's Bakery has a total cost of production for two levels of activity is as follows:
Production Cost
Activity level
Level 1
$6,750
3,000
Level 2
$9,250
5,000
The variable production cost per unit and the total fixed production cost both remain constant in the range of activity shown. Calculate the value for fixed cost.
a. $3,500
b. $2,000
c. $3,000
d. $2,500
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