Question

. Identify the formula of estimating average cost.

a. AVC/Q b. TC/Q c. TVC/Q d. AFC/Q​

Answer 1

Answer:

b. TC/Q

Explanation:

Average Cost Per Unit = Total Production Cost / Number of Units Produced.

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Answer 2

Answer:

b. TC/Q

TC/Q is the formula of estimating average cost.

Explanation:

The average cost (AC) or average total cost (ATC) is the cost per unit of output. To calculate it, divide the total cost (TC) by the quantity produced by the firm (Q).

Total cost = (TC)

Quantity produced = (Q)

=TC/Q

To calculate the average cost, divide the sum of variable and fixed costs by the number of units produced. It is also used to value inventory. In this sense, compute it as the cost of goods for sale divided by the number of units for sale. The average cost of production is the cost per unit of production calculated by dividing the total cost of production by the total number of units produced. In other words, it calculates how much money the company must spend to produce each quantity of product.