Question

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**.