Question

the total cost of producing 15 unit of vastu is rupees 195 calculate the average cost of production

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Answer 1

SOLUTION :

❍ Given :-

• Total cost of production, TC = Rs. 195

• Quantity, Q = 15 units

❍ To Calculate :-

• Average cost of production, AC = ?

❍ Required Formula :-

• $\: \: \: \: \: \: \: \: \bigstar \: \: \: \: \boxed{ \bold{ \: AC = \frac{ TC}{Q} \: }}$

❍ Calculation :-

We have,

• TC = Rs. 195

• Q = 15 units

Substituting the values in the formula, we get,

$\bigstar \: \: \sf{ AC = \frac{TC}{Q} } \\ \\ \sf{ \implies \: AC = \frac{195}{15} } \\ \\ \sf{ \therefore \: AC = 13} \: \: \:$

• Hence, the Average Cost of producing is Rs. 13.

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ANSWER :

• ★ If the Total Cost of producing 15 units of goods is Rs. 195, then the Average Cost of production is Rs. 13.

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KNOW MORE :

❒ Total Cost :-

• ➮ Total Cost (TC) refers to the total expenditure incurred by a Farm on the factors of production required for the production of a commodity. It means the sum of total fixed cost and total variable cost at various levels of output.

• ➮ Total Cost = Total Fixed Cost + Total Variable Cost (TC = TFC + TC)

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❒ Average Cost :-

• ➮ Average Cost (AC) refers to the power unit total cost of production. It is calculated by dividing the total cost by total output. Average Cost also is defined as the sum of average fixed cost and average variable cost.

• ➮ Average Cost = Total Cost ÷ Quantity (AC = TC ÷ Q)

• ➮ Avergae Cost = Average Fixed Cost + Average Variable Cost (AC = AFC + AVC)