The total cost of producing 200 units of a product is $4,000, including a total fixed cost of $1,800. This means that the average variable cost per unit is

Answer 1

To find the average variable cost per unit, we first need to determine the total variable cost. We can do this using the following steps:

1. Calculate Total Variable Cost: \[ \text{Total Variable Cost} = \text{Total Cost} - \text{Total Fixed Cost} \] Given:

   • Total Cost = $4,000
   • Total Fixed Cost = $1,800

   So, \[ \text{Total Variable Cost} = 4000 - 1800 = 2200 \]

2. Calculate Average Variable Cost per Unit: \[ \text{Average Variable Cost} = \frac{\text{Total Variable Cost}}{\text{Number of Units}} \] Given that the number of units is 200, \[ \text{Average Variable Cost} = \frac{2200}{200} = 11 \]

Thus, the average variable cost per unit is $11.