A company produces 10,000 units of a product at a total cost of $50,000. If the fixed costs are $20,000, what is the marginal cost per unit?

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Q: A company produces 10,000 units of a product at a total cost of $50,000. If the fixed costs are $20,000, what is the marginal cost per unit?

Solution: Marginal cost = (Total cost - Fixed costs) / Number of units = ($50,000 - $20,000) / 10,000 = $3.00

Steps: 7

Step 1: Identify the total cost of producing the product, which is $50,000.
Step 2: Identify the fixed costs, which are $20,000.
Step 3: Calculate the variable costs by subtracting fixed costs from total costs: $50,000 - $20,000.
Step 4: The result of the subtraction is the variable costs, which is $30,000.
Step 5: Identify the number of units produced, which is 10,000.
Step 6: Calculate the marginal cost per unit by dividing the variable costs by the number of units: $30,000 / 10,000.
Step 7: The result of the division is the marginal cost per unit, which is $3.00.