In a small scale business, the fixed cost is \(N 5,000.00\). variable costs is \(\mathrm{N} 15,000.00\) and the output is 500 units. What will be the unit cost of the goods?
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Correct Answer: Option C
Explanation:
\(\mathrm{FC}=5000, \mathrm{VC}=15000, \mathrm{Q}=500\)
Unit cost \(=\) Average \(\operatorname{Cost}(\mathrm{AC})\)
\(A C=\frac{T C}{Q}=\frac{F C+V C}{Q}\)
\(=\frac{5000+15000}{500}\)
\(=\frac{20000}{500}=N40\)
\(\mathrm{FC}=5000, \mathrm{VC}=15000, \mathrm{Q}=500\)
Unit cost \(=\) Average \(\operatorname{Cost}(\mathrm{AC})\)
\(A C=\frac{T C}{Q}=\frac{F C+V C}{Q}\)
\(=\frac{5000+15000}{500}\)
\(=\frac{20000}{500}=N40\)