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18 June, 06:40

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)

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  1. 18 June, 07:51
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    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
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