The total product is 10 units. The average total cost is $30 and the average fixed cost is $10. What is the amount of the TOTAL variable cost?
A) $300
B) $10
C) $200
D) $20
E) It is impossible to determine with the information given.

Question

Quizplus · Accepted Answer

Total cost = Total fixed cost + Total variable cost
Since average fixed cost is given as $10, total fixed cost = Average fixed cost x Total product = $10 x 10 units = $100
Also, average total cost = Total cost / Total product 
$30 = Total cost / 10 units
Total cost = 10 units x $30 = $300
Substituting the values in the first equation:
$300 = $100 + Total variable cost
Total variable cost = $200
Therefore, the amount of the TOTAL variable cost is $200.

The Total Product Is 10 Units