Question

For how many of the five products is the cost per unit more than the average cost of all the given products?

• A. 1
• B. 2
• C. 3
• D. 4

Answer 1

The correct option is A

1

Cost per unit of A = $\frac{\left(\frac{19}{100}\right)\times 11}{\left(\frac{24}{100}\right)\times 4000}$ = 217
Cost per unit of C = $\frac{\left(\frac{18}{100}\right)\times 11}{\left(\frac{19}{100}\right)\times 4000}$ = 148
Cost per unit of D = $\frac{\left(\frac{20}{100}\right)\times 11}{\left(\frac{17}{100}\right)\times 4000}$ = 229
Cost per unit of E = $\frac{\left(\frac{20}{100}\right)\times 11}{\left(\frac{22}{100}\right)\times 4000}$ = 229

Average cost of all the given products = $\frac{(217+427+148+229+229)}{5}$ = $\frac{1250}{5}$ = 250.
Therefore, only for B, the cost per unit is more than the average cost of all the given products.