Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's average total cost?
A) $12
B) $10
C) $8
D) $2

Question

Quizplus · Accepted Answer

The average total cost is calculated by dividing the total cost by the number of units produced. Here, the total cost is $2,000 and the number of earmuffs produced is 200. So, $2,000 / 200 = $10.

Ernie's Earmuffs Produces 200 Earmuffs Per Year at a Total