Given that fixed cost is N500.00, variable cost N1,500.00 and output is 50 units, what will be the average cost of producing one unit?

Given that fixed cost is N500.00, variable cost N1,500.00 and output is 50 units, what will be the average cost of producing one unit?

Answer Details

To calculate the average cost of producing one unit, we need to add the fixed cost and the variable cost, and then divide that sum by the total number of units produced. So, the total cost would be: Fixed cost + Variable cost = N500 + N1,500 = N2,000 And the average cost would be: Total cost / Number of units produced = N2,000 / 50 units = N40.00 per unit Therefore, the answer is option D, N40.00.