A company that produces baseball caps has fixed costs of $100,000,and total variable costs of $40,000 for a production volume of 20,000 units.The average variable cost per unit is
A)$5.00.
B)$2.50.
C)$0.20.
D)$0.40.
E)$2.00.

Question

Quizplus · Accepted Answer

Average variable cost (per unit)is obtained by dividing total variable cost by the related quantity: $40,000 ÷ 20,000 = $2.00 per unit.

A Company That Produces Baseball Caps Has Fixed Costs of $100,000,and