A college "marketing club" printed 1,000 "We're Number 1" bumper stickers for sale at $3.00 each as a fund-raiser. Its fixed costs were $500, and the variable cost for each sticker was $.50. The club's average cost per unit was:

Question

Quizplus · Accepted Answer

The average cost per unit is calculated by adding the total fixed costs to the total variable costs and then dividing by the number of units. Fixed costs are $500, and variable costs are $0.50 per sticker for 1,000 stickers, totaling $500. The total cost is $500 (fixed) + $500 (variable) = $1,000. Dividing by 1,000 stickers gives an average cost of $1.00 per sticker.

A College "Marketing Club" Printed 1,000 "We're Number 1" Bumper