If 48 units of output are produced and the total fixed cost is Rs 180 alongwith a total variable cost or Rs 300 what would be the average cost of production?
Answers
Answered by
2
Answer:
180+300 ÷48
=480
=48÷480
=10
Answered by
2
Answer:
Average cost of production = Rs 10
Explanation:
As per the question,
We have been provided that
Total Fixed Cost = Rs 180
Total Variable Cost = Rs 300
As we know,
Total cost is the sum of fixed cost and variable cost.
∴ Total cost = Total Fixed Cost + Total Variable Cost
⇒ Total cost = Rs 180 + Rs 300
⇒ Total cost = Rs 480
Also,
Total cost = Number of units (output) × Average cost of production
∴ Average cost of production = Rs 480 ÷ 48
⇒ Average cost of production = Rs 10
Hence, the average cost of production = Rs 10
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