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A firm producing 7 units of output has an average total cost of Rs. 150 and has to pay Rs. 350 to its fixed factors of production. How much of the average total cost is made up of variable cost ?
- a)Rs. 200
- b)Rs. 50
- c)Rs. 300
- d)Rs. 100
Correct answer is 'D'. Can you explain this answer?
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Most Upvoted Answer
A firm producing 7 units of output has an average total cost of Rs. 15...
Given information:
- Units of output = 7
- Average total cost = Rs. 150
- Fixed cost = Rs. 350
To find: Variable cost
Formula:
Average total cost = Total cost / Units of output
Total cost = Fixed cost + Variable cost
Calculation:
We know that,
Average total cost = Total cost / Units of output
150 = (350 + Variable cost) / 7
1050 = 350 + Variable cost
Variable cost = 1050 - 350
Variable cost = Rs. 700
Now, we need to find how much of the average total cost is made up of variable cost. That can be calculated as:
Variable cost / Average total cost * 100
= 700 / 150 * 100
= 466.67%
However, this percentage is not a possible answer. We need to find how much of the average total cost is made up of variable cost in rupees. That can be calculated as:
Variable cost / Average total cost * Total cost
= 700 / 150 * (350 + 700)
= 100
Therefore, the answer is option (d) Rs. 100.
- Units of output = 7
- Average total cost = Rs. 150
- Fixed cost = Rs. 350
To find: Variable cost
Formula:
Average total cost = Total cost / Units of output
Total cost = Fixed cost + Variable cost
Calculation:
We know that,
Average total cost = Total cost / Units of output
150 = (350 + Variable cost) / 7
1050 = 350 + Variable cost
Variable cost = 1050 - 350
Variable cost = Rs. 700
Now, we need to find how much of the average total cost is made up of variable cost. That can be calculated as:
Variable cost / Average total cost * 100
= 700 / 150 * 100
= 466.67%
However, this percentage is not a possible answer. We need to find how much of the average total cost is made up of variable cost in rupees. That can be calculated as:
Variable cost / Average total cost * Total cost
= 700 / 150 * (350 + 700)
= 100
Therefore, the answer is option (d) Rs. 100.
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Community Answer
A firm producing 7 units of output has an average total cost of Rs. 15...
Here the amt of total fixed cost is given soo first we have to remove the amt of avg fixed cost i.e. 350/7=50 now the avg cost = total avg cost -fixed avg cost 150 -50 100 hence answer becomes D
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A firm producing 7 units of output has an average total cost of Rs. 150 and has to pay Rs. 350 to its fixed factors of production. How much of the average total cost is made up of variable cost ?a)Rs. 200b)Rs. 50c)Rs. 300d)Rs. 100Correct answer is 'D'. Can you explain this answer?
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A firm producing 7 units of output has an average total cost of Rs. 150 and has to pay Rs. 350 to its fixed factors of production. How much of the average total cost is made up of variable cost ?a)Rs. 200b)Rs. 50c)Rs. 300d)Rs. 100Correct answer is 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A firm producing 7 units of output has an average total cost of Rs. 150 and has to pay Rs. 350 to its fixed factors of production. How much of the average total cost is made up of variable cost ?a)Rs. 200b)Rs. 50c)Rs. 300d)Rs. 100Correct answer is 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A firm producing 7 units of output has an average total cost of Rs. 150 and has to pay Rs. 350 to its fixed factors of production. How much of the average total cost is made up of variable cost ?a)Rs. 200b)Rs. 50c)Rs. 300d)Rs. 100Correct answer is 'D'. Can you explain this answer?.
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