Company has fixed cost of 7000 for plant and equipment and c

Company has fixed cost of $7,000 for plant and equipment and costs of $600 for each unit of output. What is total cost at varying levels of output? If unit output = 30 units.

Solution

the cost per unit calculation is: (Total fixed costs + Total variable costs) / Total units produced

the cost per unit = ($7000 + $600 ) /30

= $7600/30 =$253.3 cost per unit