Your company makes widgets. The total cost of production consist of $1,500,000 in fixed cost +...

Your company makes widgets. The total cost of production consist of $1,500,000 in fixed cost + variable costs of $150 per widget produced. If your firm makes 10,000 widgets what will the total cost per widget produced?

Expert Solution

CALCULATION OF THE RECOVERY RATE OF FIXED COST PER UNIT OF WIDGET

Total Fixed Cost =	$ 15,00,000
Divide By	"/"By
No. of Units Produced =	10,000 Widgets
Recovery rate Per unit =	$ 150


CALCULATION OF THE COST PER WIDGET PRODUCED

PARTICULARS	AMOUNT

Variable Cost Per unit =	$ 150
Fixed Cost Per unit	$ 150
Total Cost per Widget Produced =	$ 300

Answer = Cost per Widget =$ 300 Per unit

ekkarill92 answered 2 years ago

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