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5 February, 00:53

I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and sold each one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000 and a total cost of $36,000. I'MaGadgetCo's average fixed cost to produce 9,000 widgets was A. $1.00B. $3.00C. $4.00D. $7.00

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  1. 5 February, 01:09
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    A.

    Explanation:

    Total costs are equal to total fixed costs plus total variable costs.

    TC = FC + VC

    Per unit, the equation is:

    Total costs per unit = (total fixed costs / units of production) + unit variable costs.

    In this example, the equation is:

    TC $36.000 = FC + VC $27.000

    $36.000 - $27.000 = FC

    $9.000 = FC

    FC per unit = FC / units of production

    FC per unit = $9.000 / 9.000 units of production

    FC per unit = $1
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Home » Business » I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and sold each one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000 and a total cost of $36,000.
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