The total fixed costs are $10,000, and the average variable cost per unit is $3. For a production volume of 10,000 units, the average cost per unit is
A) $3.
B) $1.
C) $4.
D) $3.3.
E) $10

Question

Quizplus · Accepted Answer

The formula for calculating average cost per unit is:
Average Cost per unit = (Total Fixed Cost + Total Variable Cost) / Number of Units Produced
Total variable cost = Average variable cost per unit * Number of units produced
Total fixed cost = $10,000
Average variable cost per unit = $3
Number of units produced = 10,000
Total variable cost = $3 * 10,000 = $30,000
Average cost per unit = ($10,000 + $30,000) / 10,000 = $4

The Total Fixed Costs Are $10,000, and the Average Variable