Assume that the Unit Price on Firm X\'s product is $ 20 Per Unit. The Unit Varia

Question

Assume that the Unit Price on Firm X's product is $ 20 Per Unit. The Unit Variable Cost is $ 10 Per Unit, and the Fixed Cost equals $ 50,000. Based upon this scenario Determine the # of units which must be sold to generate a $ 50,000 Operating Profit Determine the Average Total Cost (ATC), Average Variable Cost (AVC), and Average Fixed Cost (AFC) for the B/E Point. j Determine the ATC, AVC, and AFC for the # of units computed in Part e. k. Determine the Marginal Cost Per Unit for between the B/E Point and the # of units computed in Part e.

Explanation / Answer

Unit price=20/unit

Unit variable cost=10/unit

Fixed cost=50000

Operating profit =revenue -cost of goods sold-all operating expenses

So here OP =50000

So no of units are 5000units

Revenue =100000

Variable cost =50000

ATC=TC/Q=total cost =Variable cost+fixed cost

50000+50000=100000

100000/5000=20

AVC average variable cost =50000/5000=10

Average fixed cost =50000/5000=10

Marginal cost per unit=change in cost /change in quantity =0.5

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