A company produces 1,000 units of a product at a total cost of $10,000. If the f

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Question: A company produces 1,000 units of a product at a total cost of $10,000. If the fixed costs are $4,000, what is the marginal cost per unit?

Options:

$6.00
$4.00
$10.00
$8.00

Correct Answer: $6.00

Solution:

Marginal cost = (Total cost - Fixed costs) / Number of units = ($10,000 - $4,000) / 1,000 = $6.00

A company produces 1,000 units of a product at a total cost of $10,000. If the f

Practice Questions

A company produces 1,000 units of a product at a total cost of $10,000. If the fixed costs are $4,000, what is the marginal cost per unit?

$6.00
$4.00
$10.00
$8.00

Questions & Step-by-Step Solutions

A company produces 1,000 units of a product at a total cost of $10,000. If the fixed costs are $4,000, what is the marginal cost per unit?

Step 1: Identify the total cost of producing the product, which is $10,000.
Step 2: Identify the fixed costs, which are $4,000.
Step 3: Calculate the variable costs by subtracting fixed costs from total costs: $10,000 - $4,000 = $6,000.
Step 4: Identify the number of units produced, which is 1,000.
Step 5: Calculate the marginal cost per unit by dividing the variable costs by the number of units: $6,000 / 1,000 = $6.00.

Marginal Cost Calculation – Understanding how to calculate marginal cost by subtracting fixed costs from total costs and dividing by the number of units produced.
Fixed vs. Variable Costs – Differentiating between fixed costs (which do not change with production volume) and variable costs (which do).

A company produces 1,000 units of a product at a total cost of $10,000. If the f

What’s inside this PDF?

A company produces 1,000 units of a product at a total cost of $10,000. If the f

Practice Questions

Questions & Step-by-Step Solutions

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