If total costs are $20,000 at an output of 2000 units and $25,000 at an output of 2,500 units, variable costs per unit are:

Question

Quizplus · Accepted Answer

Variable costs per unit are calculated by finding the change in total costs divided by the change in output. The change in total costs is $25,000 - $20,000 = $5,000, and the change in output is 2,500 - 2,000 = 500 units. Therefore, variable cost per unit is $5,000 / 500 = $10 per unit.

If Total Costs Are $20,000 at an Output of 2000