Question

Production volume of 1,200 units cost incurred Rs. 10,000 and production volume of 1,400 units cost incurred Rs.20, 000. The variable cost per unit would be?

Answer 1

approximately between 300 to 400

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Answer 2

Answer:

Rs.50 per unit.

Explanation:

in producing 1200 units, the total cost incurred was 10000, and

in producing 1400 units, the total cost incurred was 20000

1400 - 1200 = 200 units

20000 - 10000 = 10000 cost

which means when we produced 1200 units the total cost was 10000 but when we increased production to 1400 units, the total cost increased to 20000, so the difference (20000 - 10000 = 10000) should be of variable cost

now by dividing "total variable cost by quantity" i.e, 10000/200 = 50 per unit.

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