Question: If a company has total costs of $200,000 and sells 4,000 units, what is the average cost per unit?
Options:
$50
$40
$60
$30
Correct Answer: $50
Solution:
Average Cost per Unit = Total Costs / Number of Units = $200,000 / 4,000 = $50.
If a company has total costs of $200,000 and sells 4,000 units, what is the aver
Practice Questions
Q1
If a company has total costs of $200,000 and sells 4,000 units, what is the average cost per unit?
$50
$40
$60
$30
Questions & Step-by-Step Solutions
If a company has total costs of $200,000 and sells 4,000 units, what is the average cost per unit?
Step 1: Identify the total costs of the company, which is $200,000.
Step 2: Identify the number of units sold, which is 4,000 units.
Step 3: Use the formula for average cost per unit: Average Cost per Unit = Total Costs / Number of Units.
Step 4: Plug in the values: Average Cost per Unit = $200,000 / 4,000.
Step 5: Calculate the result: $200,000 divided by 4,000 equals $50.
Average Cost Calculation – This concept involves determining the average cost per unit by dividing total costs by the number of units produced or sold.
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