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A company incurs a total cost of $50,000 for producing 5,000 units. What is the
A company incurs a total cost of $50,000 for producing 5,000 units. What is the average cost per unit?
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A company incurs a total cost of $50,000 for producing 5,000 units. What is the average cost per unit?
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Average Cost per Unit = Total Cost / Number of Units = $50,000 / 5,000 = $10.
Questions & Step-by-step Solutions
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Q: A company incurs a total cost of $50,000 for producing 5,000 units. What is the average cost per unit?
Solution:
Average Cost per Unit = Total Cost / Number of Units = $50,000 / 5,000 = $10.
Steps: 6
Show Steps
Step 1: Identify the total cost of production, which is $50,000.
Step 2: Identify the total number of units produced, which is 5,000.
Step 3: Use the formula for average cost per unit: Average Cost per Unit = Total Cost / Number of Units.
Step 4: Substitute the values into the formula: Average Cost per Unit = $50,000 / 5,000.
Step 5: Perform the division: $50,000 divided by 5,000 equals $10.
Step 6: Conclude that the average cost per unit is $10.
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