A company that produces baseball caps has fixed costs of $100,000,total variable costs of $40,000 for a production volume of 20,000 units.The average variable cost per unit is:
A) $5.00.
B) $2.50.
C) $0.20.
D) $0.40.
E) $2.00.

Question

Quizplus · Accepted Answer

Average variable cost (per unit) is obtained by dividing total variable cost by the related quantity. $40,000/20,000 = $2.00 per unit.

A Company That Produces Baseball Caps Has Fixed Costs of $100,000,total