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10 November, 19:11

If dozier had produced 1,001 units instead of 1,000 units, how much incremental manufacturing cost would it have incurred to make the additional unit?

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  1. 10 November, 19:19
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    The additional cost will be total variable cost per unit.

    For example assume that total variable cost per unit for the unit is $2 and the selling price of unit product is $5. The fixed cost is $100,000 and the unit produced are 35000

    Now

    Total cost for 35000 units = $100,000 + $2*35000 units = $170,000

    Now assume that we have produced 35001 units,

    Total cost for 35001 units = $100,000 + $2*35001 units = $170,002

    The additional cost is $2 per unit which is Total variable cost per unit.
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