A firm is operating with a total variable cost of RsRs is 500 when 5 units of the given output are produced and the total fixed cost is RsisRsis 200

Accounting Dec 08, 2020

A firm is operating with a total variable cost of RsRs is 500 when 5 units of the given output are produced and the total fixed cost is RsisRsis 200. What will be the average total cost of producing 5 units of output?

Expert Solution

Total variable cost = Rs.500

Total fixed cost = Rs.200

Total cost = Rs.700

Out produced = 5 units

Average total cost = TCQ=7005=Rs.140

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