Answer (C) is correct . The average total cost per unit is calculated by dividing total costs (fixed variable) by the number of units produced. Thus, $25,000 divided by 500 units produces a unit cost of $50.
Answer (A) is incorrect because Using total fixed costs instead of total costs results in $20, which includes total variable costs.
Answer (B) is incorrect because Using total variable costs instead of total costs results in $30, which includes total fixed costs.
Answer (D) is incorrect because The average of fixed costs per unit and variable costs per unit is $25.
|
