The total cost y of producing x units is given by the equation 3x-4y+600=0. find the fixed overhead cost and also find the extra cost of producing an additional unit
Answers
Given : The total cost Y of producing X units is given by equation 3X-4Y+600=0.
To Find : the fixed overhead cost
extra cost of producing an additional unit.
Solution:
3X-4Y+600=0.
=> 4Y = 3X + 600
X = 0
=> 4Y = 3(0) + 600
=> 4Y = 600
=> Y = 150 ( this is the cost when no units being produced)
Hence fixed overhead cost = 150
X = 1
=> 4Y = 3(1) + 600
=> Y = 603/4
Cost increased in 1 unit = 603/4 - 150 = 3/4
Hence cost of producing an additional unit. = 3/4
fixed overhead cost = 150
cost of producing an additional unit. = 3/4
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