Question

For manufacturing a certain item, the fixed cost is $\text{Rs.}6000$ and cost of producing each unit is $\text{Rs.}20.$ Then the average cost of producing $15$ units is

[2 marks]

• A. $\text{Rs.}400$
• B. $\text{Rs.}440$
• C. $\text{Rs.}420$
• D. $\text{Rs.}320$

Answer 1

The correct option is C $\text{Rs.}420$

Let $x$ be the number of units produced.
Then total cost, $T\left(x\right)=6000+20x$
Total cost of producing $15$ units $=T\left(15\right)=6000+20\times 15$
$\Rightarrow T\left(15\right)=6300$
Now, average cost of producing $15$ units is
$\frac{T\left(15\right)}{15}=\frac{6300}{15}=420$