Question

The average total cost of producing electronic calculators in a factory is $30 at the current output level of 220 units per week. If fixed cost is $735 per week, then what is the firm's variable cost? (enter answer as just a number, no commas, dollar signs, or the like)

Answer 1

Answer:

The variable cost (related to the production volume) will be 5,865 in total per week (220 units)

or 26.66 per unit

Explanation:

220 units x 30 dollar total unit cost =  6,600

the total cost is compose of both, variable and fixed cost so we have to subtract the fixed cost to arrive to the variable cost.

total cost = fixed + varible

total - fixed = variable

6,600 - 735 = 5,865

The variable cost are 5,865 in total

while: 5,865 / 220 = 26,66 per unit