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a company would like to produce 1000 products per week for 5 weeks.the direct material cost for the raw materials used in the product is $2.75 per product.in order to start production, the company must purchase a special drill that costs $600.00 (this is a one-time purchase).what is the total cost per product?

Respuesta :

From the given information in the question, The total cost per product is $2.87.

Total cost per unit = Variable cost + Fixed cost

                              = $2.75 + [$600/ (1000×5)]

                              = $2.87 per product

  • In economics, total cost is the total of all expenses a company incurs to produce a particular level of output. It is typically expressed as the sum of all fixed costs (such as the cost of a building lease and the cost of large machinery), which do not change depending on how much output is produced, and all variable costs (such as the cost of labor and raw materials), which do change depending on the output level. Long-term rate of growth in variable costs with increasing output will be progressively greater if fixed costs are not changed (e.g., by purchasing a larger building or more heavy gear). This is because extra units of output have diminishing returns.

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