Q05. Total production in July is 40 units. What is the approximate average unit cost for July?
(a) 3600
(b) 90
(c) Total monthly costs = Fixed Cost + Variable Cost
= (800 + 1200) + 3600 = Rs. 5600
∴ Average unit cost = 5600 / 40 = 140.0 140 (approx.).
Q06. ABC Ltd. is considering increasing the production level. What is the approximate marginal cost of increasing production from its July level of 40 units?