Question

If the total cost for producing 1000 units is Rs. 12000, and for 1100 units, it is 13,000; the nature of cost is
a) Variable cost

b) Fixed cost

c) Semi variable cost

d) The information is not sufficient

Answer 1

Answer:

a) Variable cost

as the cost varies based on the quantity produced

Explanation:

Hope it helps

Answer 2

Answer:

a) Variable cost

If the total cost for producing 1000 units is Rs.12000 and for 1100 units it is 13000; the nature of cost is Variable cost.

Explanation:

Variable cost is the cost which changes with every increase in the production units. In the given situation, cost changes for every increase in the quantity.

Variable cost is also called as marginal cost.

Marginal cost analysis helps in managerial decision making.

It helps to understand the cost, volume and profit margin.